Indonesia's annual inflation rate eased to 3.23% in October from 3.28% in September, Statistics Indonesia (BPS) said on Monday, as a jump in chili prices kept food costs climbing while underlying price pressure stayed soft. Consumer prices rose 0.22% from September, slower than the 0.30% monthly gain a month earlier.

For investors in Southeast Asia's largest economy, the mix matters more than the headline. Core inflation, which strips out food and government-set prices, was 2.56% year on year, according to BPS figures reported by Investortrust. That is well below the headline number and close to the midpoint of Bank Indonesia's target of 2.5%, plus or minus 1 percentage point. Headline inflation remains under the 3.5% top of that band but is moving closer to it, Warta Ekonomi noted, and it is higher than a year ago, when the annual rate was 2.86%.

The data arrive after a punishing month for Indonesian assets. The Jakarta Composite Index lost 16.7% in October, its worst month since March 2020, after MSCI raised the possibility of reclassifying the market.

Chili and vegetables drive the monthly gain

The consumer price index rose to 112.56 in October from 112.31 in September, BPS data showed. Prices have risen 2.40% since the start of the year, up from 2.17% through September, Kontan reported.

Ateng Hartono, the BPS deputy for distribution and services statistics, told a press conference in Jakarta that food, beverages and tobacco was the main source of the monthly increase. Prices in that group rose 0.51% and added 0.15 percentage point to the overall rate, Kontan reported.

Red chili was the single largest contributor, adding 0.13 point on its own. Bird's eye chili added 0.05 point and tomatoes 0.04 point, while green mustard, chayote and white cabbage each added 0.01 point, according to Warta Ekonomi. Air fares contributed a further 0.01 point.

One item pulled the other way. Gold jewelry prices fell during the month, leaving the personal care and other services group down 0.06% on a monthly basis, Kontan reported.

Broken down by BPS's three main components, volatile food prices jumped 0.77% on the month and contributed 0.13 point. Core prices rose 0.12%, adding 0.07 point, and administered prices, such as regulated fuel and transport fares, increased 0.09%, adding 0.02 point, Investortrust reported.

Food and transport lead the annual rate

On a year-on-year basis, the picture is broader. Volatile food prices were 5.81% higher than in October 2025, and administered prices were up 3.24%, according to the BPS figures reported by Investortrust. Core inflation accounted for 1.64 points of the 3.23% headline rate, volatile food for 0.96 point and administered prices for 0.63 point, Warta Ekonomi reported.

Transportation posted the fastest annual increase among the 11 spending groups, at 4.87%, according to NU Online. Food, beverages and tobacco followed at 4.82%, and personal care and other services at 4.52%. Housing, water, electricity and household fuel rose just 1.06%, the slowest of any group.

The food group contributed 1.40 points to annual inflation, Suara.com reported, with bird's eye chili, fresh fish, rice, cooking oil, chicken and beef among the main drivers. Transportation added 0.59 point, led by gasoline, air fares, engine lubricants, motorcycles and car servicing. Gold jewelry, despite its monthly decline, was still higher than a year earlier, Ateng said. It was the main driver of the personal care group, which added 0.32 point.

Wide gaps between provinces

Price pressure varied sharply across the archipelago. Every province recorded annual inflation in October, Suara.com reported. North Sulawesi had the highest rate at 8.07%, while Jakarta had the lowest at 2.52%, according to NU Online. Among individual cities and regencies, North Minahasa in North Sulawesi topped the list at 10.16%, and the city of Tangerang was lowest at 2.13%.

Month on month, South Papua posted the biggest increase, at 1.12%, while Gorontalo recorded the steepest decline, a fall of 0.67%, Investortrust reported.

For Bank Indonesia, the October report offers some comfort on underlying inflation but little room on food. Volatile food inflation of 5.81% is more than twice the core rate, and chili prices have been a recurring source of swings in Indonesia's consumer price index.