Indonesia’s accelerating food inflation might prompt a hike by new central bank chief

As another wave of inflation spills over from energy costs and ripples through the global economy, the #ASEAN nations have not been immune. We’ve introduced a high-frequency index of Indonesian food prices to assess where CPI might be headed in real time.

Our daily index has shown food inflation hovering between 4.8% and 5.1% for most of September, driven by vegetable prices. The index has been consistently much higher than the 4% August print for the food component of the CPI. (Food is especially influential, given its 23% weighting in the national inflation basket.)

The inflation spike complicates the picture for Indonesia’s central bank, which held its key rate steady. Policy makers have almost completely reversed 2025’s cutting cycle; new central bank chief Destry Damayanti might have to hike before the end of 2026 – especially if the @European Central Bank and US Federal Reserve continue their own tightening, which could put renewed pressure on the rupiah.