Indonesia Macro Update - INF 01 Aug 2025
KBVS MACRO UPDATE
Monday, 4 July 2025
Jul '25 Inflation Driven By Back-to-School and Changing Weather Factors
As projected by KBVS, Indonesia’s Consumer Price Index (CPI) inflation in Jul ‘25 rose to 0.30% MoM or 2.37% YoY. This increase was primarily driven by the new academic year cycle that typically occurs in June and July, then by an increase in the volatile food component.
Looking ahead to Aug ‘25, the impact of PDAM water price adjustments in those 18 regions, potential extreme weather, and the depreciation of the Rupiah in the final week of July may also lead to increased inflation. Nonetheless, with the end of the holiday season and academic year-related price pressures, coupled with a potential easing of geopolitical risks and global oil prices, we expect to support further declines in the annual education cycle and transportation costs.
Regards,
KBVS Research Team