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View all search resultsInflation ticks up, putting pressure on BI
The food price squeeze could persist into next year as El Nino conditions linger into early 2027, raising the risk of weaker agricultural output and further price increases.
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A vendor serves customers shopping for staple foods on June 11, 2026, at Kahayan Market in Palangka Raya, Central Kalimantan. (Antara/ Auliya Rahman)
Inflation ticked higher last month as surging food prices put a burden on consumers and added pressure on the central bank.
The consumer price index (CPI) rose 3.28 percent year-on-year (yoy) in September, according to Statistics Indonesia (BPS) data presented on Thursday, up from 3.19 percent in August and bringing inflation closer to the upper end of Bank Indonesia’s (BI) target range of 1.5 to 3.5 percent.
Goods in the food, beverages and tobacco category were the biggest contributors to annual inflation, with higher prices for red and bird’s eye chilies, chicken, rice and eggs among the main drivers, BPS official Ateng Hartono told a press conference.
Meanwhile, lower airfares and gold jewelry prices provided offsets to the increase.
Read also: Trade surplus grows in August on higher manufacturing exports
Inflation in the volatile food category, which BPS tracks separately from the main index, jumped to 5.03 percent. This far outpaced core inflation, which measures long-term price trends and stood at 2.84 percent. Meanwhile, administered price inflation stood at 3.25 percent.
“Food prices came under pressure from weaker horticultural production, weather conditions and stronger demand,” Ateng said.
