Purbaya: RI Fiscal Remains Under Control amid US - Iran Conflict

JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadewa ensures that global geopolitical turmoil has not significantly disrupted Indonesia's financial stability.

This was conveyed by Purbaya before meeting with President Prabowo Subianto at the Presidential Palace Complex, Jakarta. He said that the impact of the conflict between the United States and Iran would be seen first from the export sector and the world oil price.

According to him, the government has calculated various scenarios for oil price spikes. Even if the price of oil reaches 92 US dollars per barrel, the state budget can still be controlled.

"I have calculated (the price of crude oil) up to 92 (US dollars per barrel) we can still control the budget, so there is no problem," said Purbaya as reported by ANTARA, Tuesday, March 3.

Purbaya emphasized that there was no excessive concern regarding the condition, because the government had room to adjust fiscal policy.

Regarding the possibility of the situation worsening, including if there is a disruption in the distribution channel such as the closure of the Strait of Hormuz which has an impact on oil imports, Purbaya admitted that import prices could increase and potentially suppress the budget deficit.

However, the government will make anticipations by strengthening state revenue, especially from taxes and customs.

"We just make sure that our first tax collection, our tax collection with the Customs and Excise, is not leaked. That has reduced the pressure on the deficit," he said.

He added that after ensuring optimal acceptance, the government would calculate the subsequent impact and determine additional steps if necessary.

Purbaya is optimistic that the national economy will remain solid as long as domestic demand, which contributes around 90 percent to the economy, remains maintained.

"Our economy can still progress, there is no problem. And even if it is above, as long as we can manage domestic demand, which contributes 90 percent to the economy, we can still survive," he added.