Indonesia’s Central Statistics Agency (BPS) reported that the country’s inflation rate in October 2025 reached 0.28% on a month-to-month (mtm) basis. Concurrently, the annual or year-on-year (yoy) inflation stood at 2.86%.
Historically, Indonesia has consistently experienced inflation every October from 2021 to 2025, with the sole exception of deflation in 2022. Notably, the inflation recorded in October 2025 marks the highest level compared to all previous October figures from 2021 to 2024, indicating a significant upward trend.
The primary driver behind the monthly inflation was the personal care and other services expenditure group, which saw an inflation rate of 3.05% and contributed a significant 0.21% to the overall figure. Pudji Ismartini, Deputy for Distribution and Services Statistics at BPS, highlighted during a press conference in Jakarta on Monday (3/11) that gold jewelry was the dominant commodity propelling inflation within this group, contributing an equal 0.21%.
Furthermore, an analysis of the components reveals that October 2025 inflation was predominantly fueled by a surge in core inflation, which accounted for a 0.25% contribution. The key commodities exerting this upward pressure on core inflation were identified as gold jewelry and tuition fees for academies or universities.
This latest release from BPS underscores a noticeable increase in inflation compared to previous months. However, economists suggest that these inflationary pressures remain within acceptable limits and align with Bank Indonesia’s (BI) established targets, offering a tempered perspective on the current economic climate.
Yusuf Rendy Manilet, an economist at the Center of Reform on Economics (Core) Indonesia, emphasized that Indonesia continues to grapple with the challenges posed by the global economic landscape. He noted that last month’s inflation surge was primarily influenced by volatile factors, particularly fluctuations in global commodity prices, with gold being a significant example.
Yusuf further elaborated to Katadata.co.id on Monday (3/11) that “the movement of gold prices frequently mirrors international economic uncertainties, including exchange rate volatility and a heightened demand for safe-haven assets.” Concurrently, the rising cost of food commodities signals persistent challenges within domestic supply chains, a factor that also contributed to the upward trajectory of core inflation.
Overall, Yusuf characterized the current economic situation as one facing the risk of short-term price instability. Nevertheless, he reassured that the present inflation level remains comfortably within Bank Indonesia’s target range of 2.5% plus or minus 1%. While October’s inflation was indeed relatively higher compared to previous months in 2025, Yusuf asserted that “it has not yet reached extreme levels akin to the high inflation periods experienced pre-pandemic,” providing a crucial context to the current figures.
Despite existing price pressures, economists largely agree that Indonesia’s inflation remains on a safe trajectory. Yusuf projects that the annual inflation rate will stabilize between 2.0% and 2.5% until the end of 2025, consistent with Bank Indonesia’s target. This optimistic projection, however, hinges on the absence of major external shocks, such as a sharp rise in global energy prices or extreme weather disruptions that could severely impact food production.
Adding another layer of analysis, Josua Pardede, Chief Economist at Bank Permata, observed that fiscal and monetary policies increasingly geared towards economic recovery could potentially exert inflationary pressure from the liquidity side, estimated at 0.3-0.5 percentage points. Yet, he believes such pressures can still be mitigated effectively. Josua affirmed that “as long as the output gap remains negative and food and energy supplies are well-maintained, 2025 inflation is expected to stay controlled within the 2.0%-2.5% yoy range.” He also noted that transportation discount policies implemented in the fourth quarter of this year could further help curb seasonal fluctuations.
Conversely, Josua warned about the persistent risks of global uncertainty, which could depress the rupiah exchange rate and trigger imported inflation. He also highlighted that a smoother food supply and effective agricultural input efficiency policies, such as lowering fertilizer price caps, could surprisingly lead to inflation rates even lower than anticipated.
Considering these multifaceted factors, economists broadly conclude that Indonesia’s inflation in 2025 is poised to remain within a manageable and safe zone. The synergy of prudent fiscal and monetary policies, coupled with robust domestic supply stability, will be paramount in safeguarding public purchasing power amidst ongoing global uncertainties.
Summary
Indonesia’s inflation rate in October 2025 reached 0.28% month-to-month and 2.86% year-on-year, representing the highest October figure since 2021. The personal care and other services expenditure group primarily drove this monthly increase, with gold jewelry identified as the dominant commodity contributor. Core inflation also contributed significantly, propelled by gold jewelry and university tuition fees, though these pressures remain within Bank Indonesia’s established targets.
Economists attribute this inflation surge to global economic uncertainties, particularly volatile commodity prices like gold, and persistent challenges within domestic food supply chains. Despite risks of short-term price instability, they reassure that the current inflation level remains comfortably within Bank Indonesia’s target range. Projections indicate annual inflation will stabilize between 2.0% and 2.5% until the end of 2025, provided there are no major external shocks, positioning Indonesia’s inflation in a manageable and safe zone.
