Indonesia’s inflation stayed firmly within target in November 2025, reflecting effective monetary and fiscal coordination. Despite pressures from global commodity prices and domestic supply challenges, consumer prices remained under control. This stability reinforces confidence in Indonesia’s economic resilience heading into 2026.
Key Facts & Background
- Overall Inflation:
- November 2025 Consumer Price Index (CPI/IHK) inflation: 0.17% month-to-month (mtm).
- Annual inflation: 2.72% year-on-year (yoy), within Bank Indonesia’s target of 2.5±1%.
- Policy Coordination:
- Stability achieved through consistent monetary policy and strong collaboration between Bank Indonesia, central government, and local governments via TPIP (Central Inflation Control Team) and TPID (Regional Inflation Control Team).
- Supported by the National Food Security Program to manage supply-side risks.
- Core Inflation:
- November 2025 core inflation: 0.17% mtm, down from 0.39% mtm in October.
- Driven mainly by rising global gold prices, impacting jewelry costs.
- Annual core inflation: 2.36% yoy, stable compared to the previous month.
- Volatile Food Inflation:
- November 2025 volatile food inflation: 0.02% mtm, nearly unchanged from 0.03% mtm in October.
- Key driver: shallot prices, affected by limited supply due to weather disruptions and higher seed costs.
- Annual volatile food inflation: 5.48% yoy, down from 6.59% yoy in October.
- Administered Prices Inflation:
- November 2025 administered prices inflation: 0.24% mtm, up from 0.10% mtm in October.
- Main contributor: airfare increases, linked to higher mobility and rising aviation fuel (avtur) costs.
- Annual administered prices inflation: 1.58% yoy, slightly higher than 1.45% yoy in October.
- Outlook:
- Bank Indonesia projects inflation will remain within the 2.5±1% target range through 2025 and 2026.
Strategic Insights
The ability to maintain inflation within target despite external shocks demonstrates the strength of Indonesia’s policy framework. Coordinated action between monetary authorities and government institutions has proven crucial in balancing price stability with economic growth. This synergy enhances credibility and investor confidence, positioning Indonesia as a resilient emerging market.
The influence of global gold prices on domestic core inflation highlights Indonesia’s exposure to international commodity markets. While core inflation remains stable, the episode underscores the importance of monitoring global price movements and diversifying domestic economic drivers. Maintaining stability in core inflation is essential for anchoring long-term expectations.
Volatile food inflation, driven by shallot supply disruptions, illustrates the vulnerability of domestic food markets to climate variability. The decline in annual food inflation reflects the impact of proactive measures such as the National Food Security Program. Continued investment in agricultural resilience and supply chain efficiency will be critical to mitigating future shocks.
The uptick in administered prices, particularly airfares, signals the rebound of consumer mobility and travel demand. While this reflects positive economic activity, it also raises concerns about affordability for households. Policymakers must balance growth in mobility with measures to contain energy costs and ensure accessibility.