Indonesia: Inflation moderates in August
Latest reading: Inflation eased to 2.3% in August, easing slightly from July’s 2.4% and remaining within Bank Indonesia’s 1.5–3.5% target range for the fifth consecutive month. The decline reflected lower prices for transportation plus slowing price growth for housing and utilities plus textiles. Meanwhile, food and recreation prices rose at a faster clip than in July.
The trend was unchanged, with annual average inflation coming in at July’s 1.5% in August. Meanwhile, core inflation edged down to 2.2% in August from the previous month’s 2.3%.
Lastly, consumer prices dropped 0.08% in August over the previous month, contrasting July’s 0.30% rise. August’s result marked the weakest reading since May.
Panelist insight: United Overseas Bank’s Enrico Tanuwidjaja and Vincentius Ming Shen said:
“Looking ahead, inflation may accelerate due to continued increases in gold prices and demand, rising food prices, and higher demand for non-subsidized fuel amid supply constraints—particularly from non-government sources. Additionally, potential inflationary impacts from the US tariffs may exert upside risks to our inflation forecast.”