Rising food prices were offset by lower personal care and transportation costs, resulting in Indonesia's headline inflation falling to 2,31% (yoy) in August 2025, remaining within Bank Indonesia's target range of 1,5-3,5%. Core inflation slowed to 2,17% (yoy), indicating weak domestic demand. Externally, portfolio capital flows strengthened the Rupiah in early September, but sentiment reversed after […]
In June 2025, inflation increased slightly to 1,87% (yoy), driven by supply constraints on key food commodities and continued price pressures on goods and services, particularly gold jewelry. Despite foreign capital outflows from the bond and stock markets, the Rupiah appreciated by 0,22% (month-on-month), supported by a weakening US dollar. Looking ahead, […]
Headline inflation eased to 1,60% (yoy) in May 2025 after the end of the Eid al-Fitr seasonal cycle and demand for staple foods began to normalize and pushed down price levels. Furthermore, indications of the continuing “lipstick effect” imply weak purchasing power while trade war tensions push down aggregate demand. However, the escalation of the trade war tends to ease during the […]
Headline inflation was recorded at 1,95% (yoy) in April 2025, returning to Bank Indonesia’s target range of 1,5-3,5%, up from 1,03% in March. This increase occurred after the end of the 50% electricity tariff discount for households with electricity capacity below 2.200 VA. Core inflation also increased driven by rising gold and car prices. Although […]
Indonesia recorded its first positive headline inflation in 2025 in March. Recorded at 1,03% (yoy), headline inflation increased from -0,09% (yoy) in the previous month. The return of inflation to positive territory largely reflects the end of the 50% electricity tariff discount that took place from January to February 2025. Inflation is expected to increase slowly as various […]
Indonesia experienced deflation of 0,09% (yoy) in February 2025, below Bank Indonesia’s target range of 1,5%-3,5%, mainly due to electricity tariff adjustments. Core inflation remained stable, indicating that the decline was not driven by weakening demand. Inflationary pressures are expected to increase in the coming months as demand increases during the fasting month and the end of subsidies […]
The rupiah remained under pressure throughout last month, especially due to the revised expectation that the Fed will cut interest rates only twice in 2025, compared to the previous projection of four rate cuts. The adjustment reflects still-high inflation in the US and the potential inflationary impact of policies that may be taken by the former […]