Indonesia's consumer price index (CPI) dropped for the first time in over two decades in February, according to official data released on Monday, reported the Economic Times.
This decline followed a significant reduction in electricity bills by the government to boost economic growth.
The CPI decreased by 0.09% year-on-year in February, marking the first instance of annual deflation since March 2000. This outcome was far below market forecasts of a 0.60% inflation rate.
This also marked the second consecutive month the annual CPI fell below the central bank's inflation target range of 1.5% to 3.5%.
Inflation for January stood at 0.76%.
The main contributors to the annual deflation included utilities, driven by a 50% discount on electricity tariffs for certain customers in January and February.
Additionally, lower prices for food items like rice, tomatoes, and red chilies played a role, as food production rebounded in the past two months from the effects of last year's drought.
The CPI is expected to increase starting in March as the discounted electricity tariffs end, but it will remain relatively low due to new government policies offering discounts on airfares and tolls during the Ramadan period, according to Bank Danamon economist Hosianna Situmorang, reported the Economic Times.