HARIANEXPRESS – Consumer Price Index (CPI) inflation in July 2026 is projected to ease, driven by moderating food prices, according to forecasts from Permata Bank and Bank Mandiri, (2/8/2026).
Permata Bank estimates annual inflation will drop to 3.08% year-on-year (yoy) from 3.34% in June 2026. Bank Mandiri forecasts annual inflation at 3.06% (yoy) for the same period.
The primary driver for this slowdown is the easing pressure on volatile food prices, as stated by experts. Reduced prices of commodities like chicken eggs, red onions, red chilies, and bird’s eye chilies during the harvest season are significant contributing factors.
Faisal Rachman, Head of Macroeconomic and Financial Market Research at Permata Bank, emphasized the trend.
“Inflasi diperkirakan melandai seiring meredanya tekanan harga pangan. Secara tahunan, inflasi IHK diproyeksikan menurun pada Juli 2026 karena harga pangan mulai melandai,” ujar Faisal.
Permata Bank projects monthly inflation to decrease to 0.05% month-to-month (mtm) from 0.44% in June. This deceleration is largely due to an anticipated deflation in the volatile food group.
Despite overall easing, core inflation is expected to see a slight increase, rising to 2.80% (yoy) from 2.76%. This upward movement is influenced by the ongoing transmission of production costs and seasonal rises in education expenses.
Andry Asmoro, Chief Economist at Bank Mandiri, also anticipates monthly inflation of 0.03% for July. He noted that inflationary pressures from volatile food and administered prices are subsiding following non-subsidized fuel price adjustments in the previous month.
The volatile food group is estimated to experience 1.12% (mtm) deflation, a reversal from the 0.14% inflation recorded in June. Reduced prices for red chilies and red onions are key contributors to this deflationary trend.
Andry Asmoro further detailed the bank’s projections.
“Bank Mandiri memperkirakan Indeks Harga Konsumen (IHK) Indonesia mencatat inflasi sebesar 0,03% secara bulanan (month-to-month/mtm) pada Juli 2026, melambat dibandingkan inflasi 1,41% mtm pada Juni 2026,” ucapnya.
Conversely, Bank Mandiri projects core inflation to rise to 0.29% (mtm) from 0.23% in June. This increase is primarily attributed to education costs at the start of the new academic year, contributing approximately 0.06 percentage points to monthly inflation.
Looking ahead, Permata Bank warns of potential price pressures in the second half of 2026. Domestically, government growth-oriented policies like the Free Nutritious Meal Program (MBG) are expected to increase food demand.
Without a corresponding boost in agricultural production and supply chain strength, this could trigger food inflation. The potential for a stronger El Niño phenomenon is also a concern, as it could disrupt agricultural output.
Such a disruption would likely drive up food commodity prices further. External factors also pose risks, including geopolitical uncertainties in the Middle East and the US Federal Reserve’s interest rate policy direction.
These elements could weaken the rupiah and exacerbate imported inflation. Permata Bank estimates year-end 2026 inflation to be around 3.13%, assuming the government maintains subsidized energy prices. Under this base scenario, the BI Rate is projected to remain stable at 5.75%.
