Jusuf Kalla cautions subsidies could swell as a result of the Iran war

JAKARTA — The 10th and 12th Vice Presidents of Indonesia, Jusuf Kalla, warned that the war involving Iran could have significant impacts on Indonesia’s economy, particularly in relation to rising energy prices and the burden of government subsidies.

He spoke to reporters after breaking the fast and performing tarawih prayers with the management and members of the Korps Alumni Himpunan Mahasiswa Islam (KAHMI) at his residence in South Jakarta on Friday 6 March 2026.

“The impact on Indonesia is felt directly in the economy. Fuel prices are rising, LPG prices are rising, and that means government subsidies will be even larger,” Kalla said in a statement on Saturday 7 March 2026.

According to him, Indonesia’s fuel stock is relatively limited and needs to be anticipated by the government.

“If the war lasts longer, our fuel stocks will be limited. That could cause difficulties for economic activities and business,” he said.

Therefore, JK believes that the government needs to determine state expenditure priorities so as not to overburden the national finances. He warned that the risks to the national economy could increase and could even potentially affect international confidence in Indonesia’s economy if spending is not managed properly.

“There must be a comprehensive evaluation of economic policy, especially in the use of the budget. The country must set priorities so that expenditure is not excessive,” he said.

JK emphasised that, as the country with the world’s largest Muslim population, Indonesia needs to demonstrate a firm diplomatic position.

“There must be alignment. How can we side with Israel, or with the United States that is attacking? Logically, we should side with the country of Iran,” he said.