Indonesia’s April Inflation Hits 7-Month High on Utility Price Rebound

Indonesia’s consumer price inflation rose to 1.95% year-on-year (y/y) in April 2025, up from 1.03% y/y in March, according to new data from Badan Pusat Statistik (BPS). The pickup was primarily driven by utility prices, which rebounded after months of subdued growth following the expiration of temporary electricity subsidies.

Utility costs rose 1.60% y/y in April—the first increase in four months—as the earlier electricity discount programme fully ended and the delayed impact of January’s VAT rate hike began to show in energy bills. In contrast, price movements in most other categories were relatively muted.

On an annual basis, food and personal care remained the key drivers of inflation, each contributing around 0.6 percentage points (pps) to the headline figure. Utilities and restaurant prices followed, each adding 0.2–0.3 pps. Transport and communications, meanwhile, exerted mild disinflationary pressure as transport prices fell for the first time since late 2024.

Core inflation also edged higher to 2.50% y/y in April, up slightly from 2.48% in March, reflecting modest but broad-based underlying price pressures.

Despite the acceleration, headline CPI inflation remains below the midpoint of Bank Indonesia’s 2.5% ±1% target band. However, with the VAT hike effects still feeding through, inflation is likely to inch closer to the 2.5% mark in the coming months.

For now, April marks the highest inflation rate since September 2024, confirming a gradual upward trend. We continue to anticipate inflation to average 2% y/y in 2025. This provides Bank Indonesia sufficient headroom to cut rates to drive economic momentum, which appears to be slowing down.