Indonesia Inflation Eased Slightly in October

By Ying Xian Wong

Indonesia's consumer inflation eased slightly last month though prices were supported by more expensive food, beverages and tobacco, as well as transport.

The country's consumer-price index in October rose 3.23% compared with the same period a year earlier, after rising 3.28% in September, the statistics agency said Monday. Higher prices for food, beverages and tobacco, as well as transport, were the main contributors to inflation.

The CPI in October rose 0.22% compared with the previous month, after September's 0.30% increase.

Core inflation, which strips out the impact of some items with volatile pricing, was 2.56%, compared with 2.84% in September.

Inflation is expected to remain within Bank Indonesia's 1.5%-3.5% target range, although it is approaching the upper end, ANZ economist Dhiraj Nim said in a recent note.

Higher food prices are unlikely to significantly change the central bank's policy outlook for now, with rupiah stability and global financial conditions remaining key considerations, he said.

The main question is whether persistently higher food prices will push up core inflation and lead to broader price pressures, he added.

Without clear signs of such spillovers, the October inflation data is likely to reinforce the central bank's cautious stance rather than prompt a change in monetary policy, ANZ said.

Still, the inflation outlook also depends on Bank Indonesia's ability to maintain its credibility as it balances competing economic priorities.

The central bank's efforts to support the rupiah while boosting economic growth bear some similarities to Turkey's experience, where pressure to keep interest rates low eventually undermined the central bank's credibility and fueled soaring inflation, Capital Economics economist Jason Tuvey said in a recent note.

While Indonesia's inflation remains within target and interest rates are above inflation, Capital Economics warned that further complex policy measures could undermine confidence in the central bank's ability to keep inflation under control.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

November 02, 2026 00:39 ET (05:39 GMT)