Annual Inflation Forecast to Rise to 3.21% in May

The Office of Chief Economist (OCE) or Bank Mandiri’s Economic Team forecasts that annual inflation for May 2026 will rise to 3.21% year-on-year from 2.42% in the previous month. Monthly inflation for May is predicted at 0.40% month-on-month, up from 0.13% in April.

“The rise in inflation is primarily driven by a surge in flight ticket prices and volatile food prices shifting from deflation to mild inflation,” said the Bank Mandiri OCE in its analysis on Monday, 1 June 2026. Volatile food prices are expected to see a monthly inflation of 0.20%, reversing from a 0.88% deflation in April.

According to the economic team, the inflation is due to increases in several food items, including a 23% rise in red chili, 4.1% in shallots, 0.4% in beef, and 0.3% in rice.

Core inflation is forecast to decrease to 0.19% month-on-month, down from 0.23% in the prior month. The OCE attributed this to lower gold prices and rupiah depreciation.

Meanwhile, government-regulated prices are expected to rise 1.3% month-on-month, up from April’s 0.69%. The increase is due to flight ticket prices projected to surge by 35.31% amid rising global oil prices.

Statistics Indonesia (BPS) will release May inflation data on Tuesday, 2 June 2026. In April 2026, annual inflation stood at 2.42%. By expenditure category, food, beverages, and tobacco drove the annual inflation with a 0.9 percentage point contribution and a 3.06% rate.

Personal care and other services followed with a 0.77 percentage point contribution and 11.43% inflation. “This category’s inflation is mainly driven by gold jewellery commodities,” said BPS Deputy for Distribution and Services Statistics Ateng Hartono at the BPS office in Jakarta on Monday, 4 May 2026.