Annual inflation in July expected to ease to 3.08 per cent

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

“Inflation is projected to slow from 3.34 per cent (yoy) in June 2026 to 3.08 per cent (yoy) in July 2026,” Faisal stated in Jakarta on Sunday. On a monthly basis, inflation is expected to decrease 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 downward trend is primarily influenced by volatile food components. Referring to the Strategic Food Price Information Centre (PIHPS), Bank Permata anticipates that several commodities will experience price moderation, 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 meat, beef, and garlic.

Meanwhile, inflation in government-administered prices is expected to move moderately. On one hand, the rise in airfares during the school holiday season and the normalisation of Value Added Tax (VAT) following the end of the government-borne tax policy will drive up administered price inflation. On the other hand, the decrease in non-subsidised fuel (BBM) prices, as well as non-subsidised 12kg and 5.5kg LPG, is expected to restrain inflation in this component.

As for core inflation, he expects it to record a lower monthly increase compared to June 2026. “Although seasonal price increases in goods and services related to education and recreation are expected, the decline in gold prices is expected to help restrain the rate of core inflation,” Faisal noted.

The Central Bureau of Statistics (BPS) is scheduled to announce the July 2026 inflation data on Monday (3/8). Simultaneously, BPS will also release several other economic indicators, including June 2026 export and import data, the July 2026 wholesale trade price index, the July 2026 farmer exchange rate, June 2026 tourism developments, June 2026 Indonesian transport developments, and the KSA results regarding harvested area and production of paddy and maize up to June 2026.