Arya News - Indonesia`s consumer price index (CPI) growth has risen to 3.19 year-on-year in August 2026, according to local authorities. Nevertheless, the index remains within the government’s and central bank`s target range of 2.5 plus/minus 1 percent.
JAKARTA – Inflation accelerated in August, reversing a slowdown seen in July as food and transportation prices rose, while the House of Representatives approved a new central bank governor, putting monetary stability back in focus after the surprise resignation of her predecessor.
The consumer price index (CPI) growth rose to 3.19 year-on-year (yoy) in August, Statistics Indonesia (BPS) official Ateng Hartono revealed in a press conference on Tuesday, well within the government’s and Bank Indonesia’s (BI) target range of 2.5 plus/minus 1 percent.
The August rate reversed the disinflationary trend seen in July, when annual inflation slowed to 2.88 percent.
Prices in the food, beverages and tobacco group rose 3.86 percent yoy and contributed 1.13 percentage points to headline inflation, with chicken, fresh fish, cooking oil, rice, cigarettes, bird’s eye chili, beef and red chili among the main contributors to food costs.
Transportation prices rose 4.79 percent and contributed to headline inflation, driven by higher gasoline prices, airfares, engine lubricants, motorcycles and cars. Personal care and other services recorded the highest inflation among the main expenditure groups at 9.25 percent yoy, largely due to higher gold jewelry prices.
Core inflation, which strips out volatile food and administered prices, stood at 2.92 percent in August. Inflation in government-administered prices was 3.32 percent, while volatile food inflation reached 4.06 percent.
The inflation data came after the House of Representatives on Tuesday confirmed Destry Damayanti, a 62-year-old economist, as the new BI governor, following the abrupt resignation of Perry Warjiyo in late July.
The House also approved Aida S. Budiman as senior deputy governor and Solikin M. Juhro as deputy governor.
Destry was the sole candidate after being nominated by President Prabowo Subianto last month and had been standing in as the acting chief since Perry left office. She has been a BI deputy governor since 2019.
Her appointment has been closely watched for signs of political influence over the central bank, as Prabowo’s nephew Thomas Djiwandono, a deputy governor since February, had been touted as a possible nominee.
Fitch Ratings said Destry’s nomination reinforced “expectations of policy continuity”.
Destry told reporters after the House’s session that her first priority once formally sworn in would be to sit down with the full board and establish the division of responsibilities among the deputy governors, allowing the central bank’s functions to operate effectively.
“Global uncertainty remains high, so stability will remain our priority. If our economy is stable, we can continue to maintain stability in the exchange rate and inflation,” she said.
She is due to be sworn in at the Supreme Court on Wednesday at around 15:30 Jakarta time.
Perry’s resignation came against a difficult economic backdrop, with the rupiah falling sharply and the stock market under pressure.
Perry said in a statement on Tuesday that he hoped the new board of governors would strengthen BI’s mandate to maintain stability while supporting sustainable economic growth amid continued global volatility.