Indonesia Macro Update - INF 03 Nov 2025
KBVS MACRO UPDATE
Monday, 3 November 2025
Indonesia’s Oct ‘25 Inflation: Price Movements Across Various Domestic Commodities
Indonesia’s core inflation rose to 0.39% MoM and 2.36% YoY in Oct ‘25 (Prev: 2.19% YoY), pushing headline CPI inflation higher to 0.28% MoM (Prev: 0.21% MoM). The Oct price increase was mainly driven by higher costs of several food and non-food commodities, including red chili, chicken eggs, broiler meat, carrots, oranges, machine-made clove cigarettes (SKM), gold jewelry, airfares, and higher college tuition fees.
The inflation trend was consistent with findings from the S&P Global (Nikkei) Indonesia Manufacturing PMI, which showed firms facing the sharpest increase in input costs in eight months, mainly due to rising raw material prices. Looking ahead, with inflation now hovering near the upper bound of Bank Indonesia’s target range, there is a growing risk of higher input costs for manufacturers, potentially squeezing corporate margins.
Furthermore, this environment is likely to limit the downside for government bond yields, with the 10-year benchmark (SUN 10Y) expected to remain in the 5.85%–6.15% range through the end of 2025, as investors weigh inflationary pressures against stable policy settings and global market risks.
Regards,
Fikri C. Permana – KBVS Research Team