Iran-US War Threat Poses High Risk to Global Economy and Fiscal Stability

Jakarta, CNBC Indonesia – Indonesia’s Finance Minister Purbaya Yudhi Sadewa has warned that the escalating conflict in the Middle East between the United States and Israel against Iran poses a significant risk of straining the fiscal positions of nations worldwide, including Indonesia’s, and threatening economic activity.

“The geopolitical escalation in the Middle East is highly dynamic and presents a high risk to the economy and fiscal position of various countries, including Indonesia,” Purbaya stated during a press conference on the State Budget at his office in Jakarta on Wednesday, 11 March 2026.

According to Purbaya, the risk has intensified following the conflict’s closure of one of the world’s critical energy trade routes – the Strait of Hormuz.

The rising war risk to the economy is also evident in the increasing volatility of the VIX Index and The Merrill Lynch Option Volatility Estimate (MOVE) Index, Purbaya said.

“The rising risk-off sentiment in global financial markets is evidenced by high volatility in market indices, investor shifts towards safe-haven assets, strengthening of the US dollar index, and an increase in the 10-year US Treasury yield,” Purbaya stated.