TEMPO.CO, Jakarta - Secretary of the Coordinating Ministry for the Economy, Susiwijono Moegiarso, is optimistic that the 2.92 percent annual inflation rate in December 2025 will remain within the target range of 1.5 to 3.5 percent. In December 2025, Statistics Indonesia (BPS) recorded the monthly inflation rate at 0.64 percent.
Susiwijono stated that the inflation at the end of 2025 did not suppress the purchasing power of the public. "The government believes that the current conditions will not cause a decline in people's purchasing power," he told Tempo on Wednesday, January 7, 2025.
In addition, Susiwijono stated that the government will maintain public consumption by providing social assistance, social protection, and fiscal policies to support consumption, such as value-added tax, transportation, food, energy, and other measures.
Furthermore, the central and regional governments, as well as Bank Indonesia, will continue to implement the 4K strategy, which includes Affordable Prices, Supply Availability, Smooth Distribution, and Effective Communication. "To ensure that price control remains within the target range," he said.
According to Susiwijono, the achievement of inflation within the target range is mainly due to food inflation driven by increased demand during the school holiday season, Christmas, and New Year. However, this end-of-year demand occurred amidst limited supply due to the upcoming harvest season. "In addition, supply and distribution disruptions also arose from extreme weather and flooding, especially in the Sumatra region," he said.
Nevertheless, Susiwijono ensured that the pressure of food inflation is likely to be temporary. The reason is that the seasonal effects of the year-end usually subside after the holidays, while distribution disruptions due to floods will decrease when the supply routes recover.
The Executive Director of Core Indonesia, Mohammad Faisal, stated that the government needs to immediately curb the inflation rate to prevent further suppression of people's purchasing power. Moreover, the main contributors to inflation in 2025 are mostly from food commodities. "Especially the prices of commodities that are consumed by the majority of the population," said Faisal when contacted on Monday, January 5, 2025.
In the coming year, inflation is predicted to continue until the first semester of 2026. The Economic Team of Bank Mandiri in EconMark projects that inflation in January-February 2026 will be in the range of 3.5-4.0 percent annually. EconMark projects that inflation will reach 2.78 percent annually by the end of 2026.
Chief Economist of Bank Mandiri, Andry Asmoro, attributed the increase in inflation at the beginning of 2026 to the minimum wage, the demand for the Free Nutritious Meal program, the electricity discounts in 2025, the celebration of Eid al-Fitr, increased household expenditures, and seasonal factors.
Even though it is predicted to be short-lived, Andry stated that the government must maintain the distribution and prices of food at the beginning of the year. The challenge of inflation is actually the increase in food prices. "So the solution is to maintain food supply, especially in the first quarter when there is fasting and Eid," said Andry, on Tuesday, January 6, 2025.
In the BPS report, this inflation is driven by the prices of most expenditure indices increasing. Inflation occurred in commodities such as red chili, green chili, rice, fresh fish, chicken meat, chicken eggs, shallots, coconuts, ground coffee, carrots, cooking oil, hand-rolled cigarettes, machine-rolled cigarettes, house rent, tap water tariffs, household fuel, gasoline, cars, academies/universities, and gold jewelry.
Meanwhile, the commodities that contributed to annual deflation included tomatoes, garlic, dogfruit, pork, liquid soap/dishwashing liquid, fabric softener, powdered detergent, train fares, cell phones, and Senior High School fees.
At the end of 2025, monthly inflation increased by 0.64 percent, up from 0.44 percent in 2023. The commodities contributing to the monthly inflation increase were triggered by the rise in prices of bird's eye chili, chicken meat, shallots, fresh fish, chicken eggs, rice, cooking oil, garlic, green chili, Chinese cabbage/bok choy/pitsai, water spinach, spinach, coconuts, gasoline, air transport, intercity transportation, and gold jewelry. Meanwhile, the commodities that contributed to monthly deflation were only red chilies.
Read: Bank Indonesia: 2025 Inflation Stays Within Target Range
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