However, also without the COVID-19 crisis, demand in Indonesia is typically a bit on the weaker side in the months of February and March (as demand eases after the festive holiday period in December and January). So, the decline of a 0.26 percent (m/m) inflation rate in January 2021 to 0.10 percent (m/m) in February 2021 is in line with expectations.

Still, the COVID-19 crisis clearly drags down overall demand, with Indonesia’s higher upper middle class and elite spending less money (and saving more money on bank accounts), while the country’s lower middle class (and poor) are plagued by limited purchasing power (partly because of layoffs and the loss of incomes in the micro, small and medium enterprises brought about by the COVID-19 crisis).

This shows in the declining trend of Indonesia’s core inflation (which excludes the volatile food and government administered energy prices). Over the past months, core inflation eased from 1.60 percent year-on-year (y/y) in December 2020, to 1.56 percent (y/y) in January 2021, and to 1.53 percent (y/y) in February 2021.


The full article is available in the February 2021 edition of our monthly report. This report can be ordered by sending an email to or a message to +62.882.9875.1125 (including WhatsApp).

Price of this (electronic) report:

Rp 150,000
USD $10,-
EUR €10,-

Take a glance inside the report here!




Poll Indonesia Investments

What Do You Think Will Be the Growth Rate of the Indonesian Economy in 2021?

Voting possible:  -


  • Below 2.0% (39.3%)
  • Between 2.0% and 3.0% (19.7%)
  • Above 5.0% (16.4%)
  • Between 3.0% and 4.0% (13.1%)
  • Between 4.0% and 5.0% (11.5%)

Total amount of votes: 61