Middle East Crisis: Can Indonesia's Capital Market Withstand It?

Jakarta — The Middle East crisis, which has triggered a surge in global crude oil prices, threatens not only government subsidies and inflation levels but also raises questions about the resilience of Indonesia’s financial markets.

Piter Abdullah, Policy and Programme Director at the Prasasti Center for Policy Studies, believes that global upheaval does not automatically drive investors away from the domestic market.

“Such turbulence does not automatically cause investors to exit,” Piter said in Jakarta via a press statement on Monday, 2 March 2026.

“In fact, for some, this could be an opportune moment to enter and accumulate our financial assets.”

“Regarding capital outflow flows, I am not particularly concerned,” he added.

“In recent times there has already been some adjustment, so even if some capital does exit, the volume would not be significant.”

According to Piter, no country remains entirely unaffected by global geopolitical escalation. However, the impact on Indonesia is assessed as relatively lighter compared to nations with greater export dependence.

An economic structure more heavily anchored to the domestic market is seen as a relative cushion amid uncertainty.

“Should restrictions or declining activity occur over an extended period, the impact would not be limited to the travel sector alone,” Piter said.

“This could also trigger spillover effects on domestic economic growth.”

In this situation, he emphasised the importance of government readiness in preparing various policy scenarios.

“It is difficult to predict global uncertainty,” he said.

“The government needs to prepare anticipatory measures to maintain price stability, fiscal health, and market confidence.”