Consumer Price Index (CPI) inflation in August 2025 was maintained within the 2.5%±1% target corridor. Based on inflation data published by BPS-Statistics Indonesia, the CPI index recorded 0.08% (mtm) deflation in August 2025, bringing CPI inflation annually to 2.31% (yoy).  Deflation in the reporting period was triggered by volatile food and administered prices. Inflation was maintained within the target range due to monetary policy consistency and close inflation control synergy between Bank Indonesia and the (central and regional) Government within the Central and Regional Government Inflation Control Teams (TPIP and TPID) through the National Movement for Food Inflation Control (GNPIP) in various regions. Moving forward, Bank Indonesia is confident that inflation will remain manageable and within the 2.5%±1% target range in 2025 and 2026.

The core component experienced inflation. Core inflation in August 2025 was recorded at 0.06% (mtm), retreating from 0.13% (mtm) the month earlier. The main contributors to core inflation in August 2025 were tuition fees, namely college/university and primary school fees, as well as gold jewellery. The latest developments were impacted by seasonal factors given the start of the new academic year, coupled with the upward global trend affecting gold prices, despite anchored inflation expectations. Annually, core inflation in August 2025 stood at 2.17% (yoy), down from 2.32% (yoy) in the previous period.

Volatile food experienced deflation. Volatile food (VF) in August 2025 experienced 0.61% (mtm) deflation, following 1.25% (mtm) inflation realised the month earlier. VF Deflation primarily stemmed from lower prices of tomatoes, bird's eye chilies and garlic as supply increased during the harvesting season for horticultural crops, alongside the realisation of garlic imports. Annually, VF inflation stood at 4.47% (yoy), up from 3.82% (yoy) in the previous period. Moving forward, Bank Indonesia expects to manage VF inflation effectively, supported by close synergy with the Government Inflation Control Teams through the GNPIP movement in various regions.

Administered prices also experienced deflationary pressures. Administered prices (AP) recorded 0.08% (mtm) deflation in August 2025, following 0.09 % (mtm) inflation the month earlier. The main contributors to AP deflation in the reporting period were discounted airfares to commemorate the anniversary of Indonesian independence in 2025 and adjustments to non-subsidised fuel prices. Annually, AP inflation was recorded at 1.00% (yoy), down from 1.32% (yoy) in the previous period.

Jakarta, 1^st September 2025

Communication Department

Ramdan Denny Prakoso

Executive Director