Indonesia Inflation Rate Rises to 20-Month High

Indonesia’s annual inflation accelerated to 3.55% in January 2026 from 2.92% a month earlier, the highest since May 2023. While the latest reading fell short of market forecasts of 3.8%, it edged slightly above the central bank's 1-1/2%–3-1/2% target range. Housing inflation surged sharply (11.93% vs 1.62% in December), mainly because electricity tariff discounts granted in early 2025 created a low comparison base. Price pressures persisted for food (1.54% vs 4.58%), clothing (0.56% vs 0.66%), furnishings (0.16% vs 0.2%), health (1.62% vs 1.83%), transport (0.58% vs 1.23%), recreation (1.05% vs 1.17%), education (1.11% vs 1.22%), and restaurants (1.36% vs 1.46%), although momentum eased in some segments. Meantime, deflation in communication costs lingered (-0.19% vs -0.28%). Core inflation, which strips out volatile food and administered prices, rose to 2.45%, the strongest in nine months. Monthly, the CPI fell 0.15%, after a 0.64% gain in December, marking the first drop since August.

Indonesia’s annual inflation accelerated to 2.92% in December 2025 from 2.72% in the prior month, marking the highest reading since April 2024 while staying comfortably within Bank Indonesia’s 1-1/2% to 3-1/2% target range. Food prices rose at the fastest pace in three months (4.58% vs 4.25% in November) while costs also accelerated for housing (1.62% vs 1.57%), transport (1.23% vs 0.71%), and recreation (1.17% vs 1.15%). Meantime, inflation eased for clothing (0.66% vs 0.76%), furnishings (0.2% vs 0.23%), health (1.83% vs 2.09%), accommodation and restaurants (1.46% vs 1.5%), and education (1.22% vs 1.26%). At the same time, a decline in communication cost persisted (-0.28% vs -0.25%). Core inflation, which excludes administered prices and volatile food items, stood at 2.38%, the highest level since May, after holding at 2.36% in the prior two months. Monthly, consumer prices increased 0.64%, a sharp pickup from the 0.17% increase in November and the strongest gain in eight months.

Indonesia’s annual inflation edged down to 2.72% in November 2025 from a 1-1/2-year peak of 2.86% in the previous month, remaining comfortably within Bank Indonesia’s 1-1/2% to 3-1/2% target range. Food prices rose the least in three months (4.25% vs 4.99% in October) while price growth also slowed for housing (1.57% vs 1.59%) and accommodation and restaurants (1.5% vs 1.61%). At the same time, a decline in communication cost persisted (-0.25% vs -0.25%). In contrast, inflation remained unchanged for furnishings (at 0.23%) and education (at 1.26%), but quickened for clothing (0.76% vs 0.75%), transport (0.71% vs 0.48%), and health (2.09% vs 1.61%). Core inflation, which excludes administered and volatile food prices, held steady for the second straight month at 2.36%, remaining at its highest level since June. On a monthly basis, consumer prices rose 0.17%, down from 0.28% in October and marking the softest increase in three months.