Indonesia’s annual inflation rate accelerated to 2.65% in September 2025, up from 2.31% in August, marking the highest level since May 2024. The increase was driven primarily by food prices, which rose at the fastest pace in 16 months (5.01% vs 3.99% in August). Nonetheless, the inflation rate remained within Bank Indonesia’s target range of 1.5% to 3.5%. Inflation also picked up for health (2.01% vs 1.91%), while it moderated for several categories: education (1.15% vs 1.43%), clothing (0.79% vs 0.81%), accommodation and restaurants (1.80% vs 1.85%), furnishing (0.30% vs 0.42%), and housing (1.64% vs 1.65%). Meanwhile, deflation eased slightly in transport ( -0.15% vs -0.29%) and communication (-0.31% vs -0.33%). Core inflation, which excludes administered and volatile food prices, edged up slightly to 2.19%, from August’s 11-month low of 2.17%. On a monthly basis, the CPI rose 0.21%, exceeding market expectations of a 0.13% increase, and rebounding from a 0.8% decline in August.