Consumer Price Index to Experience Deflation in August 2025

JAKARTA - Bank Indonesia (BI) stated that the Consumer Price Index (CPI) in August 2025 will remain stable at around 2.5 percent plus or minus 1 percent.

According to data from the Central Statistics Agency (BPS), the August 2025 CPI recorded deflation of 0.08 percent (month-to-month), bringing annual CPI inflation down to 2.31 percent (year-on-year).

Executive Director of the BI Communication Department, Ramdan Denny Prakoso, stated that deflation was driven by volatile food and administered prices. This controlled inflation is the result of consistent monetary policy and close synergy in controlling inflation between Bank Indonesia and the Government (Central and Regional) within the Central and Regional Inflation Control Teams (TPIP and TPID) through the National Food Inflation Control Movement (GNPIP) in various regions.

"Going forward, Bank Indonesia believes inflation will remain controlled within the target range of 2.5 percent plus or minus 1 percent in 2025 and 2026," he said in a statement on Tuesday, September 2.

Denny stated that core inflation in August 2025 was recorded at 0.06 percent (month-to-month), lower than the previous month's realization of 0.13 percent (month-to-month).

He explained that core inflation in August 2025 was primarily contributed by inflation in education costs, namely college/university and elementary school tuition fees, as well as gold jewelry.

He explained that this development was influenced by seasonal factors related to the start of the new school year and rising global gold prices, amidst maintained inflation expectations.

Denny stated that on an annual basis, core inflation in August 2025 was recorded at 2.17 percent (year-to-year), down from the previous month's inflation of 2.32 percent (year-to-year).

Meanwhile, volatile foods experienced deflation of 0.61 percent (month-to-month) in August 2025, down from the previous month's inflation of 1.25 percent (month-to-month).

Denny stated that deflation in the volatile food category was contributed by, among other things, tomatoes, cayenne pepper, and garlic, in line with increased supply during the horticultural commodity harvest period and the realization of garlic imports.

Meanwhile, on an annual basis, the volatile food category experienced inflation of 4.47 percent (yoy), higher than the previous month's inflation of 3.82 percent (yoy).

Going forward, volatile food inflation is predicted to remain under control, supported by close synergy between Bank Indonesia, the TPIP (Information and Processing Units) and TPID (Information and Processing Units) through the National National Development Planning Agency (GNPIP) in various regions.

Denny stated that administered prices experienced deflation of 0.08 percent (mtm) in August 2025, a decrease from the previous month's 0.09 percent (mtm) inflation.

According to him, deflation in the administered prices group was primarily contributed by airfares and gasoline.

This development was driven by the implementation of discounted airline tickets in commemoration of the 2025 Indonesian Independence Day and adjustments to non-subsidized fuel prices.

On an annual basis, administered prices recorded inflation of 1.00 percent (yoy), lower than the previous month's 1.32 percent (yoy).