Indonesia's Finance Ministry Optimistic Economy Will Grow Despite Hormuz Strait Disruption
Jakarta — The Director General of Economic and Fiscal Strategy at Indonesia’s Finance Ministry, Febrio Kacaribu, expressed optimism that Indonesia’s economy will continue to grow despite supply chain disruptions caused by the closure of the Hormuz Strait in the midst of the conflict between the United States, Israel, and Iran.
He stated that the Finance Ministry will implement a government spending strategy that is distributed evenly across all quarters to continue driving national economic growth.
“We want economic growth to be more evenly distributed throughout the year, where government spending will also be distributed more evenly,” Kacaribu said at the March 2026 State Budget Press Conference in Jakarta on Wednesday (11 March).
He further noted that the Finance Ministry is working to accelerate the realisation of government spending so that economic growth is expected to remain stable to achieve the targeted increase of 5.4 percent year-on-year through the end of 2026.
State spending realisation was recorded at Rp493.8 trillion, representing 12.8 percent of the target, surging 41.9 percent year-on-year as of 28 February.
“The revenue side also provides us with the opportunity to accelerate spending, because tax growth is above 30 percent,” Kacaribu said.
The Finance Ministry recorded that tax revenue grew 30.4 percent year-on-year to Rp245.1 trillion, or 10.4 percent of the target, through the end of February 2026.
Through this spending acceleration, the Finance Ministry hopes that economic growth in the first quarter of 2026 will be sufficiently strong, continuing the momentum from the fourth quarter of 2025 which reached 5.39 percent year-on-year.
“With (growth in the previous quarter at) 5.39 percent (year-on-year), we hope (growth) can reach 5.5 percent or higher in the first quarter of 2026, and we hope this economic growth momentum will continue,” he said.
In addition to accelerating spending, the government has also provided various economic stimulus measures to drive economic activity across various domestic sectors, particularly during the Eid Al-Fitr holiday period.
Kacaribu stated that the government has announced a 30 percent discount on train tickets, a 30 percent discount on basic sea freight rates, the elimination of 100 percent port service charges for ferries, and aircraft ticket discounts.
Additionally, there is food assistance in the form of rice for population deciles I through IV, totalling 35 million benefit-receiving families, as well as the distribution of holiday allowances to civil servants that has reached Rp24.7 trillion as of 10 March 2026.
“We hope this allowance distribution will significantly boost consumer purchasing power during Ramadan and ahead of Eid Al-Fitr, and is of course part of efforts to increase public spending in the first quarter of 2026 and economic growth in that quarter,” he added.