Antara News·Indonesia·Tuesday, September 1, 2026 at 12:52 PM

BI, government strengthen joint strategy to tame food inflation

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Bayu Saputra, Yashinta Difa

Jakarta (ANTARA) - Bank Indonesia (BI) and the government are ramping up joint market interventions to tame surging volatile food prices, which pushed Indonesia's monthly inflation rate to 0.21 percent in August 2026.

Speaking at the Parliament Complex on Tuesday, Acting BI Governor Destry Damayanti emphasized that maintaining food security and price stability requires concerted action between monetary authorities and regional leadership.

"Volatile food inflation has indeed risen from 2 to 4 percent. That is why BI, together with regional and central governments, is implementing a targeted program to control food inflation," Destry said.

Destry emphasized that while core inflation remains stable—rising slightly from 2.7 percent to 2.9 percent as a sign of healthy economic activity—managing volatile food prices requires direct coordination through the Regional Inflation Control Team (TPID).

Controlling volatile food inflation cannot be handled by the central bank alone, she added.

Therefore, she continued, the government must step in on the supply side to guarantee commodity availability and price stability.

Data from Statistics Indonesia (BPS) recorded a month-to-month (mtm) inflation rate of 0.21 percent in August 2026, pushing the Consumer Price Index (CPI) up to 111.97 from 111.73 in July 2026.

The primary driver of August inflation was the volatile food category, which recorded 0.88 percent inflation and contributed 0.15 percent to headline numbers.

Broiler chicken was the largest contributor to food inflation, adding 0.17 percent, followed by cayenne pepper, fresh fish, and rice, which contributed 0.02 percent each.

In the non-food sector, core inflation stood at 0.21 percent mtm, driven by price increases in gold jewelry—currently trading near Rp1.5 million (approximately US$85.71) per gram—alongside engine lubricants, mobile phones, and university tuition fees.

On the contrary, government-administered prices experienced a deflation of 0.33 percent, while the transportation sector deflated by 0.50 percent—largely driven by reduced domestic airfares and lower prices for gasoline.

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