Annual Inflation for July 2026 Expected to Ease to 3.08 Per Cent, Key Indicators Revealed

Jakarta, VIVA – The Head of Macroeconomic Research and Financial Markets at Bank Permata, Faisal Rachman, predicts that annual inflation in July 2026 will ease to 3.08 per cent year-on-year (yoy), down from 3.34 per cent (yoy) in June 2026.

“Inflation is projected to slow from 3.34 per cent (yoy) in June 20lag 2026 to 3.08 per cent (yoy) in July 2026,” Faisal stated in Jakarta on Sunday, 2 August 2026. On a monthly basis, inflation is expected to drop from 0.44 per cent month-to-month (mtm) in June 2026 to 0.05 per cent (mtm) in July 2026.

According to Faisal, the deceleration is primarily influenced by volatile food components. Referring to the Strategic Food Price Information Centre (PIHPS), Bank Permata anticipates price moderation for several commodities, particularly chicken eggs, shallots, red chillies, and bird’s eye chillies. The decrease in these commodity prices is expected to offset the rising costs of rice, chicken, beef, and garlic.

Meanwhile, government-administered price inflation is expected to move moderately. On one hand, rising airfares during the school holiday period and the normalisation of Value Added Tax (VAT) following the end of government-borne tax policies are driving up administered prices. On the other hand, the decrease in prices for non-subsidised fuel (BBM) and non-subsidised 12kg and 5.5kg LPG is helping to restrain inflation in this component.

Core inflation is expected to record a lower monthly increase compared to June 2026. “Although seasonal price increases for education and recreation-related goods and services are expected, the drop in gold prices is expected to help contain the pace of core inflation,” Faisal noted.

The Central Bureau of Statistics (BPS) is scheduled to announce the July 2026 inflation data on Monday, 3 August 2026. Simultaneously, BPS will release several other economic indicators, including June 2026 export and import data, the July 2026 wholesale price index, the July 2026 farmer exchange rate, June 2026 tourism and transportation developments, as well as KSA results regarding the harvest area and production of paddy and maize up to June 2026.