Indonesia’s economy demonstrated ongoing expansion in August 2026 as consumer activity and price levels picked up, lifting the country's annual inflation rate to 3.19 percent from the previous month, according to official data released by Statistics Indonesia (BPS). While the acceleration points to broadening economic activity, price pressures remain controlled and firmly within Bank Indonesia’s annual target corridor of 2.5 percent plus or minus 1 percent. 

The Consumer Price Index (CPI) reached 111.97 in August 2026, compared to 108.51 during the same period in 2025, recording a month-on-month inflation rate of 0.21 percent. As reported by The Jakarta Globe, BPS Deputy for Distribution and Services Statistics Ateng Hartono stated during a press briefing that “annual inflation in August 2026 stood at 3.19%, with the consumer price index rising from 108.51 in August 2025 to 111.97 in August 2026.” 

Rising food prices and gold costs were the primary drivers behind the monthly uptick. The food, beverages, and tobacco group recorded an annual inflation rate of 3.86 percent, contributing 1.13 percentage points to the headline figure. Key contributors included broiler chicken, fresh fish, cooking oil, and rice. Meanwhile, personal care and other services posted the largest annual increase among expenditure groups at 9.25 percent, propelled by gold jewelry trading near IDR 1.5 million (approximately USD 85.71) per gram. 

Despite the uptick in food costs, core inflation—which excludes volatile food and government-administered prices—remained steady at 2.92 percent year-on-year. As reported by ANTARA News, central bank leadership indicated that stable core inflation reflects healthy underlying demand and expanding commercial activity across the country, even as overall economic momentum stays at a moderate pace. 

To ensure volatile commodity prices do not hamper broader economic growth, Bank Indonesia (BI) and the national government have intensified joint market interventions through the Regional Inflation Control Team (TPID). Speaking at the Parliament Complex on 1 September 2026, BI Governor Destry Damayanti emphasized the necessity of coordinated monetary and regional supply-side strategies. 

“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. She added that central bank policy must be paired with direct government action to guarantee commodity availability and price stability. 

The release of the August inflation figures coincided with the formal confirmation of central bank leadership. On 1 September 2026, the House of Representatives confirmed Destry Damayanti as BI Governor for the 2026–2031 tenure following her service as acting governor. As reported by The Jakarta Post, credit rating agency Fitch Ratings noted that her confirmation reinforced “expectations of policy continuity.” 

Outlining her policy outlook following the legislative confirmation, Destry affirmed that the central bank will focus on maintaining economic stability to support sustainable expansion. “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,” Destry said.