BI Survey: Selling Price Pressure Rises in Q1, Expected to Ease Later

The latest survey from Bank Indonesia paints a picture of increasing business costs and price pressures in the first quarter of 2026. The weighted net balance for selling prices has climbed to 15.82%, the highest since the second quarter of 2024. This upward trend is a direct consequence of escalating expenses for raw materials and other operational necessities, as reported by businesses across various sectors.

Sectors such as Wholesale and Retail Trade, and Automotive Repair, along with Agriculture, Forestry, and Fishing, and Manufacturing, are bearing the brunt of these increased costs. This suggests a broad-based inflationary pressure stemming from supply-side factors, impacting the final prices consumers face.

Despite these challenges, there's a projected easing of price pressure in the second quarter of 2026. Businesses anticipate a decline in selling price pressures, partly due to expected decreases in operational and promotional costs. This outlook aligns with the overall inflation forecast for 2026, which stands at 2.82%, falling within the central bank's target range.

From an Indonesian perspective, this data highlights the delicate balance policymakers must strike. While businesses grapple with rising costs, the central bank's focus remains on maintaining price stability. The projected inflation rate suggests that inflationary pressures, while present, are expected to remain manageable, allowing the economy to continue its growth trajectory without significant disruption. The key will be monitoring these cost pressures and ensuring they do not derail the anticipated moderation in the coming months.

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According to respondents, the increase was mainly due to rising raw material/material costs and other operational costs.