Tensions in the Middle East are sending ripples across the global economy. The armed conflict involving the United States, Israel, and Iran is not only a geopolitical issue. The Middle East conflict is also raising concerns about economic stability in many countries, including Indonesia.
The Indonesian government is watching the situation closely. Officials warn that the war could affect the country through several economic channels.
Finance Minister Purbaya Yudhi Sadewa acknowledged that the spillover effects from the Middle East conflict into Indonesia could be wide-ranging. Because of that, the government continues to monitor developments carefully.
“For Indonesia, the impacts are transmitted through several channels that we must remain cautious about,” Purbaya said during a press conference on the state budget at his office in Jakarta on Wednesday (March 11, 2026).
The first potential impact comes from the trade sector. According to Purbaya, the conflict could push global energy commodity prices higher, partly because it has affected conditions around the Strait of Hormuz.
“Higher oil prices could increase the burden of oil and gas imports and put pressure on the trade balance surplus and the balance of payments,” Purbaya said.
If oil prices continue to climb, Indonesia may have to spend more on oil and gas imports. That situation could reduce the country’s trade surplus and weigh on its balance of payments.
Another transmission channel comes from financial markets. Geopolitical conflicts often create uncertainty, and that uncertainty can influence investor behavior.
“Global uncertainty could trigger capital outflows, put pressure on stock markets, bonds, and the rupiah exchange rate, and increase the cost of funds,” Purbaya said.
In uncertain conditions, investors often move their capital away from higher-risk markets. Developing countries like Indonesia could experience capital outflows. Such movements may put pressure on stocks, government bonds, and the rupiah exchange rate. The cost of funding could also increase.
The fiscal sector could also feel the pressure. The Indonesian state budget plays an important role in stabilizing the economy during uncertain periods.
“The state budget acts as a shock absorber even as it faces potential increases in energy subsidies and debt interest burdens, amid the possibility of windfall profits from commodities such as coal, CPO, and nickel,” Purbaya said.
In other words, the state budget helps cushion economic shocks. Still, the government may face additional pressure if energy subsidies rise or debt interest payments increase. At the same time, higher prices for commodities such as coal, crude palm oil, and nickel could bring unexpected revenue.
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Concerns about the wider impact of the conflict are also coming from lawmakers. Johan Rosihan, a member of Commission IV of the House of Representatives, urged the government to anticipate the possible effects on Indonesia’s national food security.
He believes the escalation of tensions between Iran and Israel, which involves the United States, could push global oil prices higher. If that happens, food distribution and production costs in Indonesia could also rise.
Johan delivered the warning in a written statement on Wednesday (March 11, 2026), as global tensions intensify and international energy markets grow more anxious.
According to him, the government should not focus only on the energy sector when assessing the impact of the conflict. It must also consider the potential consequences for food price stability in Indonesia.
