Consumer Price Index (CPI) inflation in June 2025 remained under control at 0.19% (mtm), with the annual rate reaching 1.87% (yoy), based on data from BPS-Statistics Indonesia.

This placed inflation firmly within the 2.5%±1% target set by the monetary authorities.

Bank Indonesia attributed the outcome to “monetary policy consistency and close inflation control synergy between Bank Indonesia and the (central and regional) Government,” through coordinated efforts of the Central and Regional Government Inflation Control Teams (TPIP and TPID) and the National Movement for Food Inflation Control (GNPIP) across regions.

Bank Indonesia stated it is “confident that inflation will remain manageable and within the 2.5%±1% target range in 2025 and 2026.”

Core Inflation Slightly Down at 2.37% YoY

Core inflation stood at 0.07% (mtm) in June 2025, remaining relatively stable compared to 0.08% (mtm) in May.

Annually, core inflation decreased to 2.37% (yoy) from 2.40% (yoy) the previous month.

The central bank noted that core inflation was “primarily influenced by higher international gold prices,” although inflation expectations remain anchored.

Volatile Food Prices Increase After May Deflation

Volatile food (VF) inflation rose to 0.77% (mtm) in June, following 2.48% (mtm) deflation in May.

The increase was mainly due to rising prices of rice, bird's eye chilies, and shallots, driven by declining supply at the end of the harvesting season and production and distribution disruptions in several regions.

VF inflation on an annual basis was recorded at 0.57% (yoy), reversing from 1.17% (yoy) deflation one month earlier.

Bank Indonesia expects VF inflation to remain effectively managed, supported by “close synergy with the Government Inflation Control Teams through the GNPIP movement in various regions.”

Administered Prices See Mild Inflation on Higher Mobility and Price Adjustments

Administered prices (AP) registered 0.09% (mtm) inflation in June 2025, shifting from 0.02% (mtm) deflation in May.

The increase was driven by higher airfares, household fuel prices, and machine-rolled clove cigarettes.

These were attributed to “increasing community mobility during the school holidays,” retail LPG price adjustments in several regions, and the continued gradual impact of higher tobacco excise duties.

AP inflation on a yearly basis stood at 1.34% (yoy), slightly down from 1.36% (yoy) in the prior month.

PHOTO: FREEPIK

This article was created with AI assistance.