CORE Estimates September Inflation at 0.1-0.2 Per Cent
The Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, estimates that Indonesia’s inflation in September 2026 will range between 0.1% and 0.2% on a monthly basis, relatively similar to August.
“If inflation in September follows, I think it will be more or less the same as August. September might be between 0.1 to 0.2 per cent,” Faisal told ANTARA in Jakarta on Wednesday.
Statistics Indonesia (BPS) recorded August 2026 inflation at 0.21 per cent month-to-month (mtm) and 3.19 per cent year-on-year (yoy). For the calendar year, inflation up to August was recorded at 1.86 per cent.
According to Faisal, the sources of inflationary pressure in September are expected to be relatively similar to the previous month, with food being the primary factor to watch. He noted that dry weather conditions caused by El Niño have the potential to disrupt the production of several food commodities, ultimately affecting supply.
“For several food ingredients in September, because we are experiencing El Niño, there will likely be constraints in terms of production due to the dry, hot season affecting various food commodities,” he said.
Bank Indonesia (BI) noted that the volatile food group experienced 0.88 per cent monthly inflation in August 2026, reversing from a deflation of 1.68 per cent in July. This inflation was primarily driven by chicken meat, bird’s eye chilli, and rice.
On an annual basis, inflation in the volatile food group in August reached 4.06 per cent, up from 2.52 per cent in the previous month.
In addition to food, Faisal accounted for the impact of price adjustments to several of Pertamina’s non-subsidised fuels (BBM) that took effect at the beginning of September. PT Pertamina Patra Niaga raised the prices of Pertamax Turbo, Dexlite, and Pertamina Dex starting 1 September 2026.
However, Faisal expects the influence of these adjustments on September inflation to be relatively small, as the types of fuel that increased in price have a more limited user base.
“But in terms of the impact on inflation, it still exists, even if it is relatively small,” he stated.
With an inflation projection of 0.1–0.2 per cent, Faisal believes that price pressures in September remain below seasonal periods that tend to record higher inflation, namely Eid al-Fitr and the Christmas and New Year period.
He noted that inflation in August, September, and October has historically tended to be relatively low, although inflation developments in these months this year are considered higher compared to patterns in previous years.
To keep inflation under control, Faisal believes the government needs to prioritise addressing disruptions in food production while ensuring that supply chains run smoothly.
“Moving forward, what needs to be addressed is the issue of food inflation due to production disruptions and weather factors,” he said.
He suggested that government focus should be directed towards preventing production and supply chain disruptions so that supply pressures do not evolve into broader price increases.
From a policy perspective, Bank Indonesia predicts that volatile food inflation will remain controlled with the support of synergy between the central and regional governments through the Central and Regional Inflation Control Team (TPIP-TPID) and the Food Inflation Control and Welfare Movement (GPIPS).
The 2026 inflation target set by the government is 2.5 per cent with a one per cent deviation. With the annual inflation in August at 3.19 per cent, Indonesia’s inflation remains within the target range.