Jakarta. Consumers in Indonesia could face higher prices for a wide range of retail goods starting in the fourth quarter of 2026 as rising production costs filter through supply chains, the country's shopping mall association has warned.

The Indonesian Shopping Center Management Association (APPBI) said retailers are likely to raise prices from around October as newly manufactured inventory reflects higher costs for raw materials, energy and logistics, while the rupiah's depreciation increases the cost of imported goods.

"New inventories will be produced using raw materials that are already more expensive," APPBI Chairman Alphonzus Widjaja said, according to remarks carried by state news agency Antara on Thursday. "Energy prices have risen, logistics costs have increased and raw material prices are higher."

The warning comes as Indonesia grapples with a weaker rupiah and elevated global commodity and transportation costs, factors that have raised input costs for businesses despite easing inflation in some sectors.

Alphonzus said the higher costs would likely affect almost all product categories because energy and logistics expenses run through the entire supply chain, from domestic manufacturing to imported merchandise.

"These cost increases affect virtually every product because logistics and energy are part of every supply chain," he said.

Even so, Alphonzus said that retailers do not see price increases as their preferred option and urged the government to act quickly to ease cost pressures before the final quarter of the year.

"We hope there will be no further increases in raw material, logistics, and energy costs," he said. "We expect the government to address these issues before the fourth quarter of 2026."

To cushion consumers from higher prices, retailers are preparing several mitigation measures, including using more cost-efficient raw materials, introducing smaller product packaging to keep prices affordable and expanding promotional campaigns and discount programs.

The association also called on the government to focus on strengthening domestic economic conditions to sustain household spending, which accounts for roughly 57% of Indonesia's economic growth.

According to Alphonzus, preserving consumer confidence and maintaining a supportive business environment will be critical to sustaining domestic demand amid mounting external pressures.

"The government should place greater focus on addressing domestic economic challenges," he said. "The priority should remain on strengthening the domestic economy."

Indonesia's economy has faced mounting headwinds this year as the rupiah weakened to record lows against the US dollar, increasing the cost of imported inputs for manufacturers and retailers. Businesses have also contended with higher logistics and energy costs, raising concerns that consumer prices could come under renewed pressure in the months ahead.

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