Government Ensures Domestic Economy Remains Stable Amid Global Geopolitical Tensions

JAKARTA - The government ensures that the development of the domestic financial economy and market remains in a safe condition, despite the increasing geopolitical tension.

Head of the Communication and Information Services Bureau (KLI) of the Ministry of Finance Deni Surjantoro explained that the government continues to closely monitor global dynamics through coordination across ministries and institutions, including Bank Indonesia and the Financial Services Authority (OJK).

He added that this monitoring was carried out regularly to anticipate various risks to the national economy and financial sector.

"Regularly, a joint assessment is also carried out within the KSSK to measure potential risks from various developments, especially globally for the Indonesian financial economy and market," he said in his statement, Monday, June 23.

Deni said that based on the results of the assessment, the current pressure experienced by the Indonesian financial market has not indicated a precarious situation.

According to him, the weakening that occurs is still in accordance with the normal market mechanism, in response to the decline in global risk appetite and its impact is expected to be temporary, and the market is still watching developments going forward.

"This week's pressure level is still in a safe range and has not had a significant impact on the economy or the performance of the domestic financial services industry, including on fiscal performance," he explained.

He added that global pressure on world oil prices is also considered to have not had a major impact on domestic inflation because the government has anticipated this potential pressure through a subsidy scheme and fuel compensation that still has fiscal space.

According to him, the function of the State Revenue and Expenditure Budget (APBN) as a shock absorber is still running effectively.

Meanwhile, the current world oil price is still below the assumption that the 2025 State Budget is 82 US dollars per barrel and as of last weekend, the price of Brent oil was recorded at 77.27 US dollars per barrel, while the average price of Indonesian crude oil (ICP) was still below 73 US dollars per barrel.

"So there is still fiscal space to reduce the flow of inflation," he said.

Deni conveyed that the government also noted that investor confidence in state debt instruments (SBN) was still maintained, even though there was capital outflow, the pressure on prices (increased yield) was still very limited and under control.

He added that the government continues to be alert to potential global risks and their impact on the national economy and initial mitigation measures have been prepared, including strengthening policy synergies between fiscal, monetary and financial authorities.

"A solid policy synergy between the government (both central and regional) is to anticipate the risk of inflation being carried out, including policy synergies with fiscal, monetary and financial authorities," he said.

Deni conveyed that structural transformations continue to be carried out, the success of maintaining the supply of fertilizers through deregulation, for example, will be continued for various commodities.

In addition, he conveyed that the government also continues to strengthen the domestic strategic sectors to be more resilient to external shocks, including diversifying energy sources and increasing national food security. The principle of prudence is still upheld in every policy making

"In the end, the government is committed to maintaining the continuity of national economic growth and protecting people's purchasing power, so that Indonesia remains on the path of recovery and development that is inclusive and sustainable," he concluded.