In August 2025, Indonesia’s Consumer Confidence Index (CCI) slipped to 117.2, down from 118.1 in July — the weakest level since late 2022. Despite the dip, the index still remains above the 100 threshold, meaning consumers on balance remain optimistic. 

The decline was broad-based: five of six sub-indices fell, including perceptions of current economic conditions, income, and job availability. Yet optimism about future income and business prospects held up better — the Consumer Expectations Index remained in the optimistic zone (~129.2) with slight improvement in income expectations for the next six months (~136.7) 

Bank Indonesia commented that the stability in confidence was underpinned by relatively solid income and spending intentions, even as job availability perceptions weakened. In August, the Job Availability Index remained in the pessimistic zone (~93.2), reflecting ongoing household unease over employment prospects. 
 
The recent dip in Indonesia’s consumer confidence is partly linked to higher inflation. Rising prices, especially for food and essential goods, have eroded households’ perception of current economic conditions and job availability. While expectations for future income remain positive, the immediate squeeze from inflation has made consumers more cautious in assessing their present situation.

In September, Indonesia’s inflation accelerated to 2.65% YoY, up from 2.31% in August, exceeding both market expectations (2.50%) and our projection (2.49%). On a monthly basis, the CPI increased 0.21%, reversing the –0.08% deflation recorded in the previous month. Core inflation edged higher to 2.19% YoY (from 2.17%), administered prices rose to 1.10% YoY (from 1.00%), while volatile food inflation surged to 6.44% YoY (from 4.47%).
 
The acceleration in prices, particularly in volatile food categories, presents a challenge for monetary policy. Although subdued domestic demand provides room for additional easing, concerns over sustained inflation constrain the possibility of significant rate cuts in the near term. We anticipate that Bank Indonesia will keep its policy rate unchanged in October, placing emphasis on maintaining rupiah stability. The central bank is also likely to allow more time for the effects of earlier rate reductions to filter through to domestic consumption before considering further easing later this year.