The NSW Bureau of Crime Statistics and Research says the overall adult population of those locked up has dropped to 12452, which is eight per cent lower than three years ago, before the pandemic.
But Indigenous over-representation has trended upwards, especially among those in youth detention, the report published on Wednesday said.
The youth detention population overall grew to 212 (both male and female) with 107 of them identifying as Indigenous, amounting to a 51.5 per cent increase since September 2021.
Among the adult prison population, almost 30 per cent of all male inmates are Indigenous.
In September there were 3639 Aboriginal adults in prison, an increase of three per cent in three years.
The number of Aboriginal female inmates has also grown by 10.1 per cent in the last year.
The quarterly update did not specify reasons for why First Nations people are disproportionately incarcerated but experts and activists have long maintained that the criminal justice system targets Indigenous people.
Last month, federal MP and criminologist Andrew Leigh said incarceration rates for Indigenous Australians nationwide are higher than for African-Americans in the United States.
He noted First Nations children are also jailed at 20 times the rate of non-First Nations children and were more likely to be jailed without being sentenced.
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