Middle East Turbulence Heats Up, Ministry Of Finance Says State Budget Is Still Safe

Rupiah (Photo: Antara)

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Nathan Kacaribu explained that the Ministry of Finance continues to manage volatility and anticipate various risks in the future.

"Yesterday we succeeded in navigating its relation to policy interest rates in the United States, the Fed, although there is still uncertainty about how it will lead in a few months, several quarters. In the future we must mitigate it," he explained to reporters, Friday, October 4.

According to Febrio, the conflict that occurred in the Middle East, namely between Iran and Israel, has been anticipated by the government because the 2024 State Revenue and Expenditure Budget (APBN) functions as a shock absorber to maintain economic stability.

"That's why our APBN, we always call it shock absorber. We have a mechanism for what if there is a global shock, especially what has an impact on the community, we can reduce it," he said.

Febrio said that the APBN already has existing provisions and can be used to anticipate the impact that will exist and is expected to be quite safe towards the end of the 2024 State Budget year.

"Yesterday, the rupiah also strengthened quite a lot and the interest rate also started to fall and the commodity price has also started to be lower than in the middle of last year," he said.

Febrio explained that until the end of this year, the implementation of the 2024 State Budget is relatively safe. However, the next challenge is of course how to anticipate and mitigate for 2025.

Previously, the Director of PT Laba Forexindo Berjangka Ibrahim Assuaibi estimated that Rupiah would approach Rp. 16,000 per US dollar again. Motivated by 3 factors that influence it.

"From External, 1. The political tension in the middle east continues to heat up, 2. The US economy continues to improve 3. The political tension of DI AS is also heating up after the US presidential election," he said.

Meanwhile, Ibrahim said that internal factors came from Deflation which continued to occur due to the decline in the middle class, reducing people's purchasing power.