Before G20 Finance Ministers, Purbaya Reveals Indonesia's Secret to Withstanding Global Turbulence
Finance Minister of the Republic of Indonesia, Purbaya Yudha Sadewa, revealed that the war in the Middle East has become a severe test for the resilience of emerging market countries.
He presented this during the “G20 1st Finance Ministers and Central Bank Governors (FMCBG) Meeting” on the sidelines of the IMF-World Bank Spring Meetings from 13-17 April 2026.
Purbaya explained that for developing countries like Indonesia, the primary concern regarding external imbalances lies in potential risks, including capital flow volatility, inflationary pressures, and spillover effects from the global financial system. In addition to impacts on the financial sector, one of the burdensome aspects is the rise in energy prices due to the war in the Middle East.
Amid this crisis, Purbaya assured that Indonesia’s state budget continues to function as a shock absorber to protect public purchasing power. The government is committed to maintaining fiscal discipline below the 3% GDP deficit limit.
Despite an outflow of foreign exchange amounting to US$1.8 billion and rupiah depreciation due to external shocks, Purbaya emphasised that Indonesia’s macroeconomic stability remains intact.
“This credibility enables Indonesia to absorb higher energy prices without sacrificing support for vulnerable groups or breaching Indonesia’s fiscal deficit limit,” Purbaya stated.
The ongoing conflict in the Middle East serves as a reminder that efficiency in processes and permitting is key to energy resilience.
In this regard, Indonesia is accelerating reforms by simplifying permitting, establishing a de-bottlenecking task force, and reducing barriers to energy imports.
He is also optimistic about achieving the 2026 growth target of 5.4% - 6% amid ongoing global tensions. This optimism stems from Indonesia’s solid economic foundation, such as a strong external position marked by a trade surplus for 70 consecutive months up to early 2026.
Furthermore, optimism is evident in Indonesia’s resilient domestic economy, supported by strong household consumption, stable growth, controlled inflation, managed fiscal deficit, low debt-to-GDP ratio, and sustainable downstreaming policies.
Purbaya added that the government will remain vigilant against dynamics in the Middle East and their potential impact on global energy prices. The government has prioritised building fiscal buffers to absorb price shocks and ensure that subsidised fuel remains stable to protect public purchasing power.
“The government’s policy response involves efficiency in state expenditure and long-term structural transformation by accelerating downstreaming initiatives,” he said.