Indonesia’s Annual Inflation Hits 2.37% in July, Food Prices Continue to Drive Pressure
Main Takeaways
|
On a monthly basis, inflation stood at 0.3%, while calendar year inflation from January to July reached 1.69%. The overall Consumer Price Index (CPI) climbed from 108.27 in June to 108.60 in July.
“This increase reflects persistent price pressures, particularly from the food, beverages, and tobacco group, which recorded 0.74% inflation month-on-month and contributed 0.22 percentage points to July’s total,” said BPS Deputy for Distribution and Services Statistics Pudji Ismartini on Friday, Aug. 1.
Among the biggest contributors were rice, with a 0.06% contribution to monthly inflation, followed by tomatoes and shallots (0.05% each), bird’s eye chili (0.04%), and gasoline (0.03%). Other contributors included chicken eggs and elementary school fees, each at 0.02%.
Volatile and Seasonal Prices Shape July Figures
Inflation in the volatile price component was the largest monthly driver, rising 1.25% and contributing 0.2 percentage points. Commodities such as rice, tomatoes, shallots, and chili drove this movement, with seasonal and supply-side dynamics playing a key role.
Core inflation, which excludes volatile and government-regulated prices, rose by 0.13% with a contribution of 0.08%, led by school tuition and education-related costs. Meanwhile, the administered price component saw a 0.09% increase, contributing 0.02% to total inflation—primarily due to higher gasoline, household fuel, and cigarette prices.
Some prices provided a counterweight. Airfares, for instance, contributed -0.03%, helping to limit the monthly increase.
Papua Pegunungan Records Highest Monthly Inflation
Inflation was not evenly distributed across the country. Papua Pegunungan province posted the highest monthly rate at 1.65%, while Papua province saw deflation of 0.34%.
BPS noted that the food, beverages, and tobacco category has consistently recorded inflation every July since 2021, with the exception of July 2024. This seasonal trend was evident again this year, driven by soaring prices of key staples. Monthly inflation for rice reached 1.35%, tomatoes jumped 19.05%, shallots rose 9.72%, and bird’s eye chili increased 14%.
Track Indonesia’s inflation trends and price indicators in real time with InvestingPro. Enjoy an exclusive Investortrust discount — click here to access the offer.