Indonesia Records 2.31% Annual Inflation in August as Food Prices Ease
Main Takeaways
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JAKARTA, Investortrust.id — Indonesia’s annual inflation eased to 2.31% in August 2025, according to the Central Statistics Agency, supported by falling food and fuel prices. The figure remained within Bank Indonesia’s official target band of 2.5% plus or minus 1% for 2025–2026.
The Central Statistics Agency, known as Badan Pusat Statistik (BPS), reported on Monday, Sept 1, 2025, that the consumer price index recorded monthly deflation of 0.08%, bringing the annual rate down from 2.37% in July. The decline was driven by the volatile food category, including tomatoes, bird’s eye chili, and garlic, alongside government-regulated prices such as airfares and non-subsidized fuel.
Bank Indonesia Executive Director of Communications Ramdan Denny Prakoso said that the moderation in inflation reflected both consistent monetary policy and close coordination with the government. The central bank, he noted, has worked with the National and Regional Inflation Control Teams (TPIP and TPID) through the National Movement for Food Inflation Control (GNPIP) to manage supply and distribution pressures.
“Looking ahead, Bank Indonesia is confident inflation will remain under control within the target range of 2.5% plus or minus 1% in 2025 and 2026,” Denny said in a press statement on Tuesday, Sept 2, 2025.
Core inflation rose 0.06% month-to-month in August, lower than July’s 0.13%. The increase came largely from education costs, reflecting the start of the new academic year, and higher global gold prices. On an annual basis, core inflation eased to 2.17% from 2.32% in July.
The volatile food category, meanwhile, fell 0.61% month-to-month after recording 1.25% inflation in July. BPS attributed the decline to increased supply of horticultural commodities during harvest and imports of garlic. Annual volatile food inflation still accelerated to 4.47% from 3.82% a month earlier.
Administered prices registered deflation of 0.08% in August, reversing a 0.09% increase in July. The decline was mainly due to airfare discounts tied to the Independence Day celebrations and adjustments in non-subsidized fuel prices. On a yearly basis, administered prices inflation slowed to 1.0% from 1.32% in July.
Regional Inflation
Regionally, 11 provinces experienced monthly inflation while 27 recorded deflation. North Sumatra registered the highest monthly inflation at 1.37%, while North Maluku recorded the deepest deflation at minus 1.9%.