Purbaya: The easing of the US-Iran conflict has the potential to reduce the burden of subsidies.

JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadewa assessed that the easing of the conflict between the United States (US) and Iran has the potential to have a positive impact on the State Budget (APBN), especially in terms of managing energy subsidies.

Purbaya explained that his party had previously anticipated the risk of global energy price volatility by setting aside a portion of the budget for subsidy needs. If geopolitical tensions ease and energy prices become more stable, the budget needs for subsidies are expected to decrease.

"Yesterday, we had set aside part of the budget for subsidies," said Purbaya, quoted by ANTARA, Monday, June 15.

According to him, the reduction in the need for energy subsidies could open up a larger fiscal space to support the government's priority programs.

"So it will be much less (the burden of subsidies) and there is room to provide financing for other programs that the president considers important. So we'll see what the development is like, then we'll adjust," he said.

However, the government will still monitor the development of global conditions and their impact on the national economy before making further adjustments to the APBN posture.

Meanwhile, the Indonesian Ministry of Foreign Affairs (Kemlu) welcomed the report on the achievement of a peaceful agreement between the United States and Iran and hoped that the escalation of conflicts in the region could be realized.

"This is a positive development towards a peaceful resolution of the conflict and the creation of peace, security, and stability in the region," the Indonesian Ministry of Foreign Affairs said through the X social media, Monday.

Previously, US President Donald Trump announced that a deal with Iran had been completed and stated that the Strait of Hormuz would be reopened and the US naval blockade lifted.

On the other hand, the Iranian government also ensured that a peace agreement with the United States had been reached. Deputy Foreign Minister Kazem Gharibabadi stated that the memorandum of understanding had been finalized and scheduled to be signed in Switzerland on June 19.

He said the agreement includes a cessation of military operations on all fronts, including in Lebanon.