Jakarta - According to data from Statistics Indonesia (BPS), the Consumer Price Index (CPI) recorded a deflation of 0.08% (mtm) in August 2025, bringing the annual CPI inflation down to 2.31% (yoy). The deflation was primarily driven by the volatile food and administered prices components.

Ramdan Denny Prakoso, Executive Director of the Communications Department at Bank Indonesia (BI), stated that the well-maintained inflation figure reflects the consistent implementation of monetary policy and the strong synergy between Bank Indonesia and the central and regional governments in inflation control through the Central and Regional Inflation Control Teams (TPIP and TPID), particularly via the National Movement for Food Inflation Control (GNPIP) across various regions.

"Looking ahead, Bank Indonesia remains confident that inflation will stay within the target range of 2.5% ±1% in both 2025 and 2026," said Denny in an official statement on Tuesday (September 2, 2025).

Denny further noted that core inflation in August 2025 stood at 0.06% (mtm), down from 0.13% (mtm) in the previous month. The core inflation in August was mainly contributed by educational expenses, particularly university and primary school tuition fees, as well as gold jewelry prices.

This development was influenced by seasonal factors, namely the start of the new academic year, and the rise in global gold prices, amid well-anchored inflation expectations. On a year-on-year basis, core inflation stood at 2.17% (yoy) in August 2025, down from 2.32% (yoy) in the previous month.

Meanwhile, the volatile food category experienced deflation in August 2025, recording -0.61% (mtm), a reversal from +1.25% (mtm) in the previous month.

“The deflation in the volatile food group was mainly due to falling prices of tomatoes, bird’s eye chilies, and garlic, driven by increased supply during the horticultural harvest season and the realization of garlic imports,” he explained.

Annually, the volatile food category recorded inflation of 4.47% (yoy), higher than 3.82% (yoy) in the previous month. Going forward, volatile food inflation is expected to remain well-managed, supported by the strong coordination between Bank Indonesia, TPIP, and TPID through GNPIP in various regions.

The administered prices category also recorded deflation of 0.08% (mtm) in August 2025, compared to an inflation of 0.09% (mtm) in the previous month.

“The deflation in administered prices was mainly driven by declines in airfares and gasoline prices. This development was influenced by airfare discounts in celebration of Indonesia’s Independence Day in August and adjustments to non-subsidized fuel prices,” he said.

On an annual basis, administered prices inflation was recorded at 1.00% (yoy) in August, down from 1.32% (yoy) in the previous month.