January 6, 2026 | 07:29 pm
TEMPO.CO, Jakarta - Bank Indonesia (BI) stated that the Consumer Price Index (CPI) inflation rate for 2025 remains within the official target of 2.5 percent, with a flexible margin of plus or minus 1 percent.
"The sustained inflation within its target range results from consistent monetary policies and close synergy between Bank Indonesia and the government in the Central and Regional Inflation Control Teams (TPIP and TPID) and the strengthening of the national food resilience program implementation," said Ramdan Denny Prakoso, Executive Director of the Communication Department at BI, on Tuesday, January 6, 2026.
BI believes that inflation will stay within this same target range throughout 2026 and 2027.
Data from the Central Statistics Agency (BPS) shows that inflation in December 2025 was 0.64 percent compared to the previous month. Meanwhile, the annual inflation rate for the end of 2025 reached 2.92 percent.
In December 2025, both monthly and annual rates saw an increase. The monthly rate jumped to 0.64 percent from 0.17 percent in November. This rise came mostly from the volatile food group, which grew by 2.74 percent, and government-regulated prices, which rose by 0.37 percent. Despite these shifts, core inflation stayed stable at 0.20 percent for the month.
The annual inflation rate of 2.92 percent consists of several different parts. Volatile food prices rose by 6.21 percent over the year. Government-regulated prices increased by 1.93 percent, while core inflation ended the year at 2.38 percent.
"Core inflation remained low at 2.38 percent in line with our interest rate policy, which keeps inflation expectations on target. It also reflects our stable exchange rate and the positive effects of digitalization," Denny explained.
Pudji Ismartini, Deputy for Distribution and Service Statistics at BPS, noted that when viewed by expenditure groups, the primary engine of annual inflation was the food, beverage, and tobacco category. This group experienced an inflation rate of 4.58 percent, accounting for 1.33 percent of the total inflation.
Outside of these staples, gold jewelry emerged as a dominant factor in the 2025 economic landscape. "Gold provided the largest single contribution to annual inflation. This commodity was the primary driver of monthly inflation eleven times in 2025," Pudji revealed during a press conference at the BPS office in Jakarta on Monday, January 5, 2026.
Read: Rupiah Weakens to 16,758 per US Dollar Amid Global Unrest
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