Forest fires and Anak Krakatau ash threaten up to Rp123.1 trillion in economic activity

Indonesia is facing overlapping disruption from forest and land fires and ash from Anak Krakatau, with consequences reaching beyond public health and mobility into transport, logistics and business planning.

The Transportation Ministry said seven airports remained closed on the morning of Sept. 7, 2026, after one airport in South Sumatra resumed operations. Soekarno-Hatta Airport in Jakarta and six others were closed until 6 p.m. More than 270,000 people were affected by delays, diversions or cancellations involving about 2,300 flights.

The ministry said it could not predict when normal operations would resume because volcanic ash movement depends heavily on wind direction and weather conditions. The closures came as smoke from forest fires was also reducing mobility and disrupting work and school routines.

The Center of Economic and Law Studies, or CELIOS, estimated that forest fires recorded from January through August could generate Rp39.29 trillion to Rp123.1 trillion in economic and health losses. The figures are projected risks, not confirmed real losses, and do not include potential damage from Anak Krakatau’s volcanic disruption.

In Central Kalimantan, the provincial government introduced distance learning on Aug. 31 in areas where air quality ranged from unhealthy to hazardous. Sana Ur Rehman, a financial markets analyst at EBC Financial Group, said the airport closures showed how quickly physical events outside the financial sector can halt normal economic activity. She said repeated disruption could affect delivery schedules, export planning and the credibility of commodity prices.

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The closure of seven airports on Monday morning, affecting more than 270,000 passengers, shows how quickly a physical event can paralyze normal economic activity. At the same time, CELIOS puts the potential economic and health losses from this year's forest fires at as much as Rp123.1 trillion. Indonesia's biggest question is how these repeated disruptions affect shipping schedules, export planning and price credibility.