Deflation itself was not a surprise as it is common for prices (particularly of food and to a lesser extent of transportation) to cool after the Ramadan-Idul Fitri peak that occurred in March and April 2025. The deflation in May 2025 therefore reflects the normalization of these prices as demand in society subsided.

It also means that the impact of the 50 percent electricity rate discount in January and February 2025 (offered by state-owned electricity company Perusahaan Listrik Negara, PLN, to customers with an electricity capacity of up to 2,200 VA) has now fully vanished from the data. While it caused heavy deflation in the first two months of the year, it (partly) prompted steep inflation (normalization) in March and April 2025. Meanwhile, Indonesia’s year-on-year (y/y) inflation eased quite significantly to 1.60 percent in May 2025 (from 1.95 percent in the previous month).

[...]

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