June inflation remained within Bank Indonesia’s target range, reinforcing confidence that price pressures are under control despite higher global energy costs.
Indonesia’s inflation remained well contained in June 2026, providing policymakers with greater confidence that domestic price stability can be maintained even as global commodity markets remain volatile. According to Bank Indonesia (BI), the Consumer Price Index (CPI) rose 0.44% month-on-month, bringing annual inflation to 3.34%, comfortably within the central bank’s target range of 2.5% ±1 percentage point.
The latest figures suggest that inflationary pressures remain manageable despite recent increases in global energy prices and transportation costs. Bank Indonesia attributed the stable outlook to its monetary policy, close coordination with the central and regional governments through Indonesia’s inflation control teams (TPIP and TPID), and ongoing food security initiatives.
Key Facts
- June 2026 CPI inflation: 0.44% month-on-month
- Annual inflation: 3.34% year-on-year
- Core inflation: 2.76% year-on-year
- Bank Indonesia inflation target: 2.5% ±1%
- Volatile food inflation: 5.58% year-on-year
- Administered prices inflation: 3.42% year-on-year
Core inflation, which excludes volatile food and government-administered prices, remained relatively stable, indicating that underlying domestic demand has yet to generate excessive price pressures. Meanwhile, food inflation eased compared with the previous month, although prices of shallots, garlic, and rice continued to rise due to lower harvests and higher transportation costs. On the other hand, administered prices accelerated following adjustments in non-subsidized fuel prices and aviation fuel, which pushed up gasoline and airfares.
The inflation data also come after Bank Indonesia raised its benchmark interest rate twice in June to strengthen the rupiah and anchor inflation expectations amid heightened global uncertainty. The tighter monetary stance is intended to safeguard macroeconomic stability while ensuring inflation remains within target through 2027.
For businesses and investors, stable inflation offers greater pricing certainty and supports consumer purchasing power. It also gives policymakers more flexibility to focus on sustaining economic growth without facing the disruptive effects of runaway prices. However, external risks—including volatile energy markets, geopolitical tensions, and weather-related disruptions to food supply—remain key factors that could influence Indonesia’s inflation trajectory in the second half of the year.