Indonesia Records Deflation in July 2026, BI Chief Cites Falling Food Prices

Jakarta, CNBC Indonesia - The easing of inflationary pressures in July 2026, resulting in deflation of 0.14% month-on-month (mtm), indicates that domestic economic activity is under control. This was stated by Bank Indonesia (BI) Acting Governor Destry Damayanti during a press conference following a regular meeting of the Financial System Stability Committee (KSSK) in Jakarta on Monday (3/8/2026). “This means the economic activity taking place is not overheating,” Destry said. She explained that the deflation recorded in July 2026, following inflationary pressure of 0.44% in June 2026, was triggered by a decline in volatile food prices. Volatile food prices in July 2026 also experienced deflation of 1.68% compared to inflation of 0.14% in the previous month. “The government’s success in managing volatile food is clearly significant, with food inflation dropping sharply,” she stressed. The deflationary conditions in July 2026 caused the annual inflation rate to fall to 2.88%, down from 3.34% the previous month. This was driven by volatile food inflation, which dropped from around 5% to just 2.52%. “Core inflation, which reflects economic activity, remains stable at 2.76%,” Destry concluded.