BI: May 2026 Inflation Maintained Through Policy and Synergy
Bank Indonesia (BI) believes that the Consumer Price Index (CPI) inflation in May 2026, which remained within the target range of 1.5% to 3.5%, is the result of consistent monetary policy and close synergy in inflation control.
Ramdan Denny Prakoso, Executive Director of the BI Communications Department, stated in Jakarta on Tuesday that BI is working alongside central and regional governments through the Central and Regional Inflation Control Teams (TPIP and TPID). Additionally, BI and the government are strengthening the implementation of the National Food Security Programme.
Ramdan expressed confidence that inflation will remain controlled within the target range of 2.5% plus or minus 1% (1.5% to 3.5%) for 2026 and 2027.
According to data from Statistics Indonesia (BPS) released on Tuesday (2/6/2026), the CPI in May 2026 recorded a monthly inflation rate of 0.28% (month-to-month), resulting in an annual inflation rate of 3.08% (year-on-year). Core inflation in May 2026 was recorded at 0.22% (m/m), slightly lower than the previous month’s 0.23% (m/m). This core inflation development was primarily influenced by rising cooking oil prices amidst maintained inflation expectations. Annually, core inflation in May 2026 was recorded at 2.59% (y/y), higher than the previous month’s 2.44% (y/y).
Furthermore, the volatile food group in May 2026 experienced inflation of 0.22% (m/m), higher than the previous month’s deflation of 0.88% (m/m). Inflation in the volatile food group was mainly contributed by red chilli, shallots, tomatoes, and rice, following supply decreases caused by production disruptions due to extreme weather and the end of the peak harvest season, alongside rising demand during the Eid al-Adha religious holiday. Annually, the volatile food group experienced inflation of 6.24% (y/y), higher than the previous month’s 3.37% (y/y).
BI stated that moving forward, volatile food inflation is expected to remain controlled, supported by close synergy between BI, TPIP, and TPID, as well as the strengthened implementation of the Food Inflation Control and Prosperous Food Movement (GPIPS).
Meanwhile, the administered prices group in May 2026 experienced inflation of 0.52% (m/m), lower than the previous month’s 0.69% (m/m). Inflation in the administered prices group was primarily contributed by household fuels, petrol, and airfares due to price adjustments for non-subsidised liquefied petroleum gas (LPG), non-subsidised fuel (BBM), and aviation fuel (avtur) following the rise in global energy prices. Annually, the administered prices group recorded inflation of 2.07% (y/y), higher than the previous month’s 1.53% (y/y).