Indonesia’s inflation rate edged up in September 2025, reversing the deflationary trend seen in the previous month. The Consumer Price Index (CPI) recorded a monthly increase of 0.21%, signaling renewed price pressures across food, education, and tobacco-related goods. As global and domestic factors continue to shape price dynamics, understanding the composition and drivers of inflation remains critical for policymakers and businesses alike.
Key Facts & Background:
- Monthly Inflation (mtm):
- September 2025: +0.21%
- August 2025: −0.08%
- CPI rose from 108.51 (August) to 108.74 (September)
- Annual Inflation (yoy): 2.65%
- Year-to-Date Inflation (ytd): 1.82%
- Main Contributors to Inflation (September 2025):
- Food, beverages, and tobacco: +0.38% (mtm), contributing 0.11% to national inflation
- Key commodities:
- Red chili: +0.13%
- Broiler chicken meat: +0.13%
- Green chili: +0.10%
- Key commodities:
- Jewelry (gold): +0.08%
- Cigarettes (SKM and SKT): +0.10%
- Higher education fees: +0.10%
- Food, beverages, and tobacco: +0.38% (mtm), contributing 0.11% to national inflation
- Inflation by Component:
- Core inflation: +0.18%, contributing 0.11%
- Dominated by gold jewelry and tuition fees
- Administered prices: +0.06%, contributing 0.01%
- Driven by cigarette prices
- Volatile prices: +0.52%, contributing 0.09%
- Driven by food items like chili and chicken
- Core inflation: +0.18%, contributing 0.11%
- Regional Inflation Trends:
- 24 provinces experienced inflation
- 14 provinces recorded deflation
- Highest inflation: Riau (+1.11%)
- Deepest deflation: South Papua (−1.08%)
Strategic Insights:
The September 2025 inflation data reflects a nuanced shift in Indonesia’s price landscape, with food and core components exerting upward pressure on the Consumer Price Index. The reversal from August’s deflation underscores the volatility of food prices, particularly in perishable goods like chili and poultry, which are sensitive to seasonal supply disruptions and distribution inefficiencies.
Core inflation’s steady rise, driven by education costs and gold jewelry, signals underlying demand-side pressures and structural price adjustments. These components are less influenced by short-term shocks and more indicative of long-term inflation trends. The increase in tuition fees, for instance, may reflect broader shifts in service sector pricing and household expenditure patterns.
The modest rise in administered prices, particularly in tobacco products, suggests calibrated adjustments in regulated sectors. While these changes have limited immediate impact, they contribute to the broader inflation narrative and may reflect fiscal or health policy interventions.
Regionally, the divergence between provinces experiencing inflation and deflation highlights the importance of localized economic conditions. Riau’s high inflation may be linked to supply chain constraints or regional demand surges, while South Papua’s deflation could stem from subdued consumption or improved food availability. This geographic variability reinforces the need for targeted policy responses and regional data monitoring.