Indonesia: Rising and broadening inflation in June

Research evidence excerpt

Indonesia: Rising and broadening inflation in June

J P M O R G A N Asia Pacific Economic Research

01 July 2026

Indonesia: Rising and broadening

inflation in June

We maintain our forecast for another 25bp BI hike to

6.00% in July

• Headline and core inflation increased to a higher-than-expected 3.3% oya and Emerging Markets Asia, Economic

2.8%, respectively, driven by a broad-based increase in price pressure. and Policy Research

• We maintain our forecast for Bank Indonesia (BI) to hike by another 25bp this Charnon Boonnuch

month to 6.00%, with risks of additional hikes further out. (65) 6807 5086

charnon.boonnuch@jpmorgan.com

• Rising and broadening inflation and our BI-FX Pressure Index (BI-FXPI), JPMorgan Chase Bank, N.A., Singapore Branch

which remains elevated, support our forecast for a July hike.

Rising price pressures

Headline CPI inflation rose to a higher-than-expected 3.3% in June (Consensus:

3.2%; J.P. Morgan: 3.1%) from 3.1% in May (Figure 1), closer to the upper end of

the BI’s 1.3-3.5% target range. In sequential and seasonally adjusted (sa) terms,

this implies headline inflation rose further to 0.4% m/m sa from 0.3%, suggesting

rising underlying price pressures amid the weakening IDR.

The surprise to our forecast was again driven by food price inflation, which posted

another large sequential increase of 0.7% m/m sa after 0.8% in the previous month.

According to the press release, the increase in food prices was also broad-based,

especially fresh fish, rice and cooking oil. Energy price inflation rose to 2.9% oya

from 0.8%, broadly tracking the upward adjustment in non-subsidized fuel prices

during the month.

Figure 1: Indonesia - CPI inflation and its source Figure 2: Indonesia - Core CPI inflation

%pt %oya

5 Food Energy 4 Core CPI inflation