Indonesia, Pakistan Inflation Rise July Amid Regional Price Pressures

Indonesia's inflation rose to 2.37% in July 2025, driven primarily by a surge in food, beverage, and tobacco prices, which contributed 1.08 percentage points to the overall increase. Provinces such as South Papua and Highland Papua experienced the highest inflation rates, both annually and monthly, with core inflation also accelerating, indicating sustained consumer purchasing power. The Bank of Indonesia has maintained a balanced monetary policy, cautiously cutting rates to stimulate growth while monitoring inflation pressures. This inflationary environment presents investment opportunities in agribusiness and utility sectors, supported by government initiatives aimed at improving food distribution and energy infrastructure. Meanwhile, Indonesia's exports grew by 11.29% year-on-year in June 2025, boosted by accelerated factory shipments during a temporary pause on new U.S. tariffs under President Trump’s administration. In contrast, Pakistan's inflation accelerated to 4.1% in July following a fuel price hike, reflecting differing inflation dynamics in the region.