Indonesia’s inflation rate in October 2025 held steady within the central bank’s target range, signaling effective monetary management and coordinated food price controls. With headline inflation at 2.86% year-on-year and monthly inflation at 0.28%, the country continues to navigate global price pressures with resilience. The data reflects a balanced inflation profile across core, volatile, and administered components—each shaped by seasonal, commodity, and policy dynamics.
Key Facts & Background
- Headline inflation (IHK) in October 2025 was 0.28% month-on-month (mtm) and 2.86% year-on-year (yoy).
- Inflation remains within Bank Indonesia’s target range of 2.5% ± 1%, consistent with projections for 2025 and 2026.
- Core inflation rose to 0.39% mtm, up from 0.18% mtm in September, driven by:
- Gold jewelry prices
- Higher academic tuition fees due to the new school year.
- Annual core inflation reached 2.36% yoy, up from 2.19% yoy.
- Volatile food inflation was 0.03% mtm, down from 0.52% mtm, but 6.59% yoy, up from 6.44% yoy, driven by:
- Red chili
- Chicken eggs
- Chicken meat, affected by weather-related supply disruptions.
- Administered prices inflation was 0.10% mtm, slightly higher than 0.06% mtm in September, with annual inflation at 1.45% yoy.
- Key contributors: machine-made clove cigarettes and airfare, linked to rising retail cigarette prices and aviation fuel costs.
- Inflation control efforts are supported by Bank Indonesia and government coordination through TPIP, TPID, and the National Movement for Controlling Food Inflation (GNPIP).
Strategic Insights
Indonesia’s October 2025 inflation data offers a snapshot of macroeconomic stability amid global uncertainty. The headline rate of 2.86%—well within the central bank’s target—reflects the success of monetary discipline and inter-agency coordination, particularly in managing food price volatility and seasonal cost pressures.
The uptick in core inflation, driven by gold and education costs, underscores the influence of global commodity trends and domestic cyclical factors. While gold prices are externally driven, tuition hikes are predictable seasonal events. Their impact on inflation is manageable, provided expectations remain anchored and wage growth stays moderate.
The volatile food segment, though elevated year-on-year, showed a sharp monthly deceleration. This suggests that weather-related disruptions, not structural imbalances, are the primary drivers. The role of GNPIP and regional inflation control teams is crucial here, as decentralized interventions—such as market operations and supply chain smoothing—can mitigate localized spikes.
Administered prices, often sensitive to policy and global fuel dynamics, remain subdued. The modest rise in cigarette and airfare costs reflects targeted adjustments rather than broad-based inflationary pressure. This gives policymakers room to maneuver without triggering public discontent or fiscal strain.