Year-End Alert: Prices Expected to Rise Again

Bank Indonesia (BI) estimates that retail prices will increase in December, potentially affecting inflation. This is reflected in the General Price Expectation Index (IEH) for December 2026, which is higher than the previous month. “In terms of prices, inflationary pressures in December 2026 are expected to increase. This is reflected in the December 2026 IEH which is forecast at 168.1, higher than the November 2026 IEH of 167.5,” according to the June 2026 Retail Sales Survey by Bank Indonesia, Tuesday (11/8/2026). The expected increase in retail prices at the end of the year aligns with rising retail sales expectations for December 2026. The Sales Expectation Index (IEP) for December 2026 was recorded at 171.6, higher than the November 2026 period of 153.8, driven by the Christmas and New Year holidays. Meanwhile, inflationary pressures for the following month, September, are expected to decrease. BI recorded the September 2026 IEH at 155.2, lower than the August 2026 IEH of 178.0. The expected decline in retail prices in September is in line with the anticipated decrease in retail sales for September 2026, reflected in the September IEP which fell to 148.3, lower than the previous period’s 159.8. “Respondents informed that the decline in the September 2026 IEP was influenced by normalisation following the Republic of Indonesia’s Independence Day (HUT RI) activities,” the survey stated.