{
    "success": true,
    "data": {
        "id": 1711952,
        "msgid": "fiscal-space-growing-tighter-amid-global-war-pressures-1777600343",
        "date": "2026-05-01 07:58:47",
        "title": "Fiscal Space Growing Tighter Amid Global War Pressures",
        "author": "Friska Yolandha",
        "source": "REPUBLIKA",
        "tags": "",
        "topic": "Economy",
        "summary": "INDEF researcher Riza Annisa Pujarama has warned that Indonesia's domestic fiscal space was already constrained before escalating global tensions from the Iran-US-Israel conflict, due to rising expenditures, slowing tax revenues, deepening deficits, and increasing debt interest and energy subsidy costs. Macroeconomic assumptions in the 2026 state budget have deviated, with the rupiah weakening to Rp17,280\u201317,400 per US dollar, oil prices surpassing $100 per barrel, and higher SBN yields, potentially adding Rp219 trillion to energy subsidies and pushing debt interest payments beyond 20% of the budget. Riza urges stricter fiscal discipline, targeted energy subsidy reforms, improved data accuracy for recipients, and strengthened social protections for vulnerable middle-class groups to prevent deficits exceeding the 3% limit and eroding investor confidence.",
        "content": "<p>Researcher from the Center of Macroeconomics and Finance at INDEF,\nRiza Annisa Pujarama, has highlighted the tight domestic fiscal space\neven before global pressures intensified due to the Iran versus US and\nIsrael war. Riza explained that this tightness stems from continuously\nincreasing expenditures amid slowing tax revenues; deepening deficits\naccompanied by negative primary balance values; and rising debt interest\npayments and energy subsidy expenditures.<\/p>\n<p>\u201cThen, the dominance of routine expenditures, which now reaches more\nthan 40 percent of total central government spending, while productive\nexpenditures such as capital spending are squeezed, remaining around\neight to nine percent of total central government spending,\u201d said Riza\nduring a discussion titled \u201c2 Months of Israel-US vs Iran War: Beware of\nImpacts on the Economy!\u201d in Jakarta on Thursday (30\/4\/2026).<\/p>\n<p>Amid the ongoing geopolitical turmoil, Riza noted that the domestic\neconomy is also affected. Several macroeconomic assumptions in the 2026\nstate budget have missed targets as of April 2026, starting from the\nrupiah exchange rate hovering around Rp17,280\u201317,400 per US dollar, oil\nprices breaching $100 per barrel, to rising SBN yields.<\/p>\n<p>Riza stated that the impacts are not only on increased energy subsidy\nburdens but also on debt interest payments, which have now exceeded 20\npercent of government spending, with a large total of maturing\nobligations. Riza said that fiscal sensitivity in the 2026 RAPBN\ndocument shows that every rise in oil prices and weakening exchange rate\nwill directly widen the deficit.<\/p>\n<p>\u201cBased on those estimates, additional subsidy needs could reach\naround Rp219 trillion if crude oil prices hit $100 per barrel,\u201d said\nRiza.<\/p>\n<p>In this situation, Riza emphasised that the government needs to\nmaintain stricter fiscal discipline while improving spending quality.\nRiza said that reforming energy subsidies is crucial to make them more\ntargeted, followed by improvements in the accuracy of recipient\ndata.<\/p>\n<p>Furthermore, Riza added, social protection also needs to be\nstrengthened, particularly for middle-class groups vulnerable to energy\nprice hikes but not fully covered by social assistance. Without\nappropriate steps, Riza assessed, the risk of the deficit breaching the\nthree percent limit could impact investor confidence and overall\neconomic stability.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/fiscal-space-growing-tighter-amid-global-war-pressures-1777600343",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}