CORE: Iran Conflict Could Trigger Price Increases in 185 Industrial Sectors in Indonesia

JAKARTA, KOMPAS.com - CORE Indonesia estimates that the escalation of the Iran conflict will impact price increases in 185 sectors in Indonesia, particularly the construction sector as well as food and beverages (mamin). Research Associate at CORE Indonesia, Sahara, stated that the Iran conflict triggers disruptions on the global supply side, especially in energy, which then drives up world oil prices. As a result, production costs rise because energy is a primary input in many sectors. Additionally, global pressures also strengthen the US dollar and cause rupiah depreciation. This situation makes the price of imported goods more expensive, especially for raw materials and capital goods that are still widely used by domestic industries. “Our calculations on import intensity in 185 sectors from Indonesia’s input-output table show that there are several sectors in Indonesia with high import dependency,” she said during a webinar on Wednesday (29/4/2026). Based on CORE Indonesia’s calculations, the combination of these factors is estimated to drive price increases in 185 domestic sectors. The construction sector recorded the highest price increase, with an estimated 3.56%. Meanwhile, the food and beverage provision sector is estimated to experience a price increase of 3.46%. This is followed by the ready-made clothing sector at 3.34%, basic iron and steel at 2.59%, and the flour milling industry and its derivatives at around 2.34%. “The greatest impact is felt by sectors that have high dependency on imported inputs and energy,” she said. Meanwhile, the food and beverage sector is vulnerable because main raw materials such as wheat, soybeans, and sugar are still largely dependent on imports, as well as distribution costs that are sensitive to fuel prices. The clothing and other textile sectors are also vulnerable to price increases due to the high proportion of imported raw material components such as accessories, which are still mostly imported.