Bank Indonesia Governor Destry Damayanti said producer-level inflation rising to around 7 percent does not automatically feed into consumer prices. She made the remarks at a press conference of the Financial System Stability Committee (KSSK) for the third quarter of 2026 in Jakarta, on 3 November 2026.
Why producer and consumer prices diverge
Statistics Indonesia (BPS) reported wholesale trade price inflation of 7 percent year on year, and producer price inflation of 6.94 percent. Consumer inflation was 3.23 percent in October.
“We need to distinguish between producer and consumer inflation,” she said. “The commodity baskets of producers are different, and the factors affecting producers and consumers are also different.”
What would worry the central bank
Damayanti said the central bank would watch the risk of pass-through if producer price increases persist. Whether that is worrying, she said, depends on whether the pressure lasts over the medium to long term and whether the composition of goods is similar.
The policy answer depends on the cause. “If inflation comes from supply, the response must address supply; if from demand, consumption must be restrained,” she said.
Source: Bank Indonesia
