BI: June Inflation Contained, Supported by Central and Regional Government Synergy

Bank Indonesia (BI) views that the Consumer Price Index (CPI) inflation in June 2026 remained within the target range, with a realisation of 3.34 percent (yoy), thanks to the close synergy in inflation control between the central bank and the central and regional governments. The maintained inflation was also supported by the strengthening of the National Food Security Programme implementation and the consistency of BI’s monetary policy. “Going forward, Bank Indonesia believes inflation will remain under control within the target range of 2.5 plus or minus 1 percent (range of 1.5-3.5 percent) in 2026 and 2027,” said BI Executive Director of the Communication Department Ramdan Denny Prakoso in a statement in Jakarta on Wednesday. Based on data from Statistics Indonesia (BPS) released on Wednesday (1/7), the CPI in June 2026 recorded a monthly inflation of 0.44 percent (mtm), bringing the annual inflation to 3.34 percent (yoy). Core inflation in June 2026 was recorded at 0.23 percent (mtm), relatively stable compared to the previous month’s realisation of 0.22 percent (mtm). The development of core inflation was mainly influenced by high global commodity prices amidst well-anchored inflation expectations. Annually, core inflation in June 2026 was recorded at 2.76 percent (yoy), higher than the previous month’s realisation of 2.59 percent (yoy). The volatile food group in June 2026 experienced inflation of 0.14 percent (mtm), lower than the previous month’s realisation of 0.22 percent (mtm). Inflation in the volatile food group was mainly contributed by shallots, garlic, and rice commodities, in line with declining production in production centres, rising transportation costs, and the end of the main harvest season. Annually, the volatile food group experienced inflation of 5.58 percent (yoy), lower than the previous month’s realisation of 6.24 percent (yoy). “Going forward, volatile food inflation is expected to remain under control, supported by the close synergy of inflation control between Bank Indonesia and the Central Inflation Control Team (TPIP) and Regional Inflation Control Teams (TPID), as well as the implementation of the Inflation Control and Food Welfare Movement (GPIPS),” said Ramdan. Meanwhile, the administered prices group in June 2026 experienced inflation of 1.41 percent (mtm), higher than the previous month’s realisation of 0.52 percent (mtm). Inflation in the administered prices group was mainly contributed by petrol and air transport fares, in line with adjustments to non-subsidised fuel oil (BBM) and avtur prices due to high global energy prices. Annually, the administered prices group recorded inflation of 3.42 percent (yoy), higher than the previous month’s inflation of 2.07 percent (yoy).