July 2026 Deflation Reaches 0.14 Percent, Driven by Key Commodities

Indonesia recorded a deflation of 0.14 percent in July 2026, a shift attributed mainly to a decrease in the prices of several food commodities, particularly shallots and chili peppers. The Central Statistics Agency (BPS) reported that the Consumer Price Index (CPI) fell from 111.89 in June to 111.73 in July.

Ateng Hartono, Deputy for Distribution and Services Statistics at BPS, explained that the food, beverage, and tobacco group saw a deflation of 0.89 percent, contributing significantly to the overall decline. Shallots alone accounted for a 0.11 percent deflationary impact, followed by red chili peppers and bird's eye chilies, each contributing 0.06 percent. Other items like chicken eggs and tomatoes also saw price drops, further pushing down inflation.

Beyond food items, the personal care and other services sector also experienced deflation, largely due to a decrease in the price of gold jewelry. However, the transportation and education sectors acted as counterbalances, showing inflation. The transportation sector's inflation was driven by rising gasoline prices, while the education sector's increase was linked to the start of the new academic year, with rising school fees and tutoring costs.

Despite the monthly deflation, Indonesia's annual inflation remained positive, standing at 2.88 percent year-on-year. Year-to-date inflation was recorded at 1.65 percent. The BPS highlighted that while food prices eased, other sectors contributed to keeping overall inflation in positive territory.