02 Jun 2025 | News & Feature

CPI: Expecting another southward campaign

  • Indonesia’s CPI inflation edged lower to 1.60% YoY in May 2025, driven by falling food prices, while core inflation remained muted.
  • Lower food prices have created a more conducive environment for a consumption recovery, a trend the government aims to reinforce through another round of stimulus packages in June–July 2025.
  • The still-elevated real interest rate, due to muted inflation, may continue to dampen loan demand, potentially encouraging Bank Indonesia to maintain its dovish bias, especially if external conditions remain favourable.