Chicken Prices Help Cool Indonesia’s May Inflation to 1.6%
Key Takeaways
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JAKARTA, Investortrust.id – Indonesia’s annual inflation eased to 1.6% in May 2025, down from 1.95% the previous month, driven by falling food prices, according to the Central Statistics Agency (BPS).
Among the top contributors to the slower inflation was broiler chicken, which recorded a year-on-year deflation of 8.57%, subtracting 0.14 percentage point from the overall inflation rate.
“This deceleration in inflation was influenced by several key commodities,” said Pudji Ismartini, Deputy for Distribution and Services Statistics at BPS, during a press briefing in Jakarta on Monday, June 2, 2025.
Food Prices Drive Disinflation
Other food items also contributed to the disinflation trend. Shallots posted a 15.26% annual deflation, contributing -0.1 percentage point, while red chili saw a sharp 21.17% drop, shaving 0.09 point off inflation.
“These commodities played a major role in easing year-on-year inflation in May,” Pudji said.
Core Inflation Remains Elevated
Despite easing food prices, core inflation—which excludes volatile and government-regulated prices—stood at 2.4% year-on-year, indicating underlying price pressures. The main contributors were gold jewelry, instant coffee, and cooking oil.
The government-regulated prices group recorded an annual inflation of 1.36%, contributing 0.27 percentage point to the headline rate. In contrast, the volatile food category experienced a deflation of 1.17%, with a -0.2 point contribution.
One of the largest contributors to annual inflation came from the personal care and other services group, which logged 9.24% inflation, contributing 0.59 point. Within this group, gold jewelry alone accounted for 0.47 point of inflation.
“This group last contributed significantly to annual inflation in August 2020,” Pudji added, “when it drove 0.45 percentage point.”
Monthly Deflation Deepens
On a monthly basis, BPS reported deflation of 0.37%, the steepest since September 2022. Pudji recalled that the last notable monthly deflation occurred in August 2022, when prices fell by 2.9% month-on-month.