Indonesia Inflation Tops Expectations

Indonesia’s annual inflation accelerated to 3.34% in June 2026 from 3.08% in the previous month, exceeding market expectations of 3.2% and marking the highest reading since March. The latest result remained within the upper end of the central bank’s 1-1/2%–3-1/2% target range. Main upward pressure came from all components, including from food (4.67% vs 4.94% in May), housing (1.04% vs 1.0%), transport (4.57% vs 2.30%), clothing (1.0% vs 0.84%), furnishings (1.44% vs 0.98%), healthcare (1.84% vs 1.70%), communication (1.26% vs 0.97%), recreation (1.40% vs 1.30%), education (1.27% vs 1.15%), restaurants (2.36% vs 2.34%), and personal care (10.1% vs 10.35%). Core inflation, which strips out volatile food and administered prices, quickened to a 38-month high of 2.76% from 2.59% in May. On a monthly basis, consumer prices rose 0.44%, quickening from a 0.28% increase in May and topping forecasts of 0.3%. It pointed to the strongest monthly rise since February.

Indonesia’s annual inflation accelerated to 3.08% in May 2026 from an eight-month low of 2.42% in the prior month, surpassing market expectations of 2.97%. Despite the pickup, inflation remained within the central bank’s target range of 1-1/2% to 3-1/2%. Food prices rose the most since last October (4.94% vs 3.06% in April), driven by higher staple costs and elevated distribution expenses across several regions. Additional upward pressures also came from housing (1.0% vs 0.74%), transport (2.30% vs 1.61%), clothing (0.84% vs 0.79%), furnishings (0.98% vs 0.60%), healthcare (1.70% vs 1.49%), communication (0.97% vs 0.83%), recreation (1.30% vs 1.19%), education (1.15% vs 1.14%), and restaurants (2.34% vs 1.93%). Core inflation, which strips out volatile food and administered prices, quickened to a three-month high of 2.59% from 2.44% in April. On a monthly basis, consumer prices increased 0.28%, up from a 0.13% rise in April and well above forecasts of 0.14%.

Indonesia’s annual inflation dropped noticeably to 2.42% in April 2026 from 3.48% in the prior month, marking the lowest level since August 2025 and remaining comfortably within the central bank's 1-1/2%–3-1/2% target range. The moderation was driven by softer price growth in key components, particularly food (3.06% vs 3.34% in March) and housing (0.74% vs 7.24%). Meanwhile, inflation held steady for healthcare (at 1.49%) and education (at 1.14%). Several categories saw firmer price pressures, including clothing (0.79% vs 0.65%), furnishings (0.60% vs 0.24%), transport (1.61% vs 0.61%), recreation (1.19% vs 1.08%), and restaurants (1.93% vs 1.42%). Also, communication prices rebounded (0.83% vs -0.03%). Core inflation, which strips out volatile food and administered prices, eased to 2.44% from March's 2.52%, indicating the softest figure in four months. On a monthly basis, consumer prices rose 0.13%, slowing from a 0.41% gain in March and signaling the mildest pace in three months.