Indonesian Finance Minister Eyes Oil Price Impact on State Budget

Indonesia's Finance Minister Purbaya Yudhi Sadewa voiced apprehension regarding the escalating global oil prices, a direct consequence of the persistent conflict in the Middle East. He explained that a surge in oil prices could potentially shrink the government's fiscal capacity to implement economic stimulus measures. However, he assured that contingency plans are in motion to ensure the national budget, known as APBN, can withstand geopolitical shocks.

"Initially, I had hoped oil prices would drop to $70 per barrel. Previously, my budget was calculated with prices at $100 per barrel, so I had extra funds to boost economic development. Now, the funds might be slightly reduced, so I need to be more careful," Purbaya stated after meeting with the General Chairman of Nahdlatul Ulama in Jakarta on Wednesday, July 22, 2026.

Despite the global economic turbulence, Purbaya remains confident in Indonesia's economic prospects. He attributes the nation's economic resilience to robust domestic demand, primarily driven by household consumption. "So, the Indonesian economy will continue to improve going forward, even if the global economy is shaky. Why? Because 90 percent of our economy is driven by domestic demand," he asserted.

The article also briefly mentions the ongoing conflict between the United States and Iran, noting Iran's Islamic Revolutionary Guard Corps (IRGC) announced an attack on an Amazon data center in Bahrain as retaliation for a U.S. military strike on a nuclear power plant construction site in Darkhovin, Iran. This geopolitical tension underscores the external factors influencing Indonesia's economic outlook.

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Tadinya kan ketika saya harap harga minyak turun ke 70 (dolar AS per barel), sebelumnya kan anggaran saya hitung dengan harga 100 (dolar AS per barel), jadi saya ada uang lebih gara-gara dipakai untuk mendorong perkembangan ekonomi. Sekarang mungkin jadi uangnya agak berkurang, jadi saya harus hati-hati lagi.