Government focuses on maintaining purchasing power amid surge in global oil prices

Jakarta (ANTARA) - The Ministry of National Development Planning/National Development Planning Agency (PPN/Bappenas) states that one of the government’s primary focuses in responding to the surge in global oil prices is to maintain the level of public purchasing power.

Director of Macroeconomic Planning and Development Model Planning at the Ministry of PPN/Bappenas, Ibnu Yahya, in Jakarta on Tuesday, explained that economic growth needs to be kept stable to prevent pressure on the national economy.

In this context, household consumption serves as a pillar of gross domestic product (GDP) with a contribution of 56 per cent.

“If oil prices are raised, consumption automatically drops. If household consumption falls, the government also cannot move much,” said Ibnu at an event titled “Unlocking Growth in The Middle Income Trap”.

At the same time, the business world is also relatively wait-and-see given the developments in the global economy influenced by geopolitical tensions.

“Consumption must not fall. That’s why the government cannot raise oil prices until the end of the year. We must secure how household consumption does not drop,” he explained.

Amid this situation, the government is taking steps to reallocate spending by ministries/institutions (K/L).

“Although from the non-K/L spending side, subsidies and debt interest payments are increasing, there is buffer space that we have formulated to withstand (the turbulence),” he added.

Ibnu said the government will monitor developments in global geopolitical tensions until June 2026. The government is optimistic that global pressures, including wars and their impact on energy prices, will begin to ease during that period, so the available fiscal buffers remain adequate to maintain stability.