Finance Minister Purbaya Reveals Positive Impact of Easing US-Iran Conflict on State Budget

Finance Minister Purbaya Yudhi Sadewa assessed that the easing of the conflict between the United States and Iran could have a positive impact on the State Budget (APBN), particularly in the management of energy subsidies. Purbaya explained that the government had previously anticipated the risk of global energy price volatility by setting aside a portion of the budget for subsidy needs. If geopolitical tensions subside and energy prices become more stable, the required subsidy budget is expected to decrease. “Previously, we had already set aside some of the budget for subsidies,” Purbaya said when met at the Parliament Complex in Senayan, Jakarta, on Monday. According to him, a reduction in subsidy requirements could open up greater fiscal space to support other government priority programmes. “So the burden will be much reduced and there will be room to finance other programmes deemed important by the president. So we will see how things develop, then we will adjust,” he stated. Nevertheless, the government will continue to monitor global developments and their impact on the national economy before making further adjustments to the APBN posture. The Ministry of Foreign Affairs welcomed reports of a peace agreement between the United States and Iran and expressed hope for de-escalation in the region. “This is a positive development towards peaceful conflict resolution and the creation of peace, security, and stability in the region,” the ministry said in a statement via social media platform X on Monday. Previously, US President Donald Trump announced that an agreement with Iran had been finalised, stating that the Strait of Hormuz would be reopened and the US naval blockade lifted. The Iranian government also confirmed that a peace agreement with the United States had been reached. Iranian Deputy Foreign Minister Kazem Gharibabadi stated that a memorandum of understanding had been finalised and was scheduled to be signed in Switzerland on 19 June. He said the agreement includes a cessation of military operations on all fronts, including in Lebanon.