Middle East War: Ministry of Trade Predicts Indonesia's Exports to Decline This Year

JAKARTA, KOMPAS.com - The Ministry of Trade (Kemendag) predicts that Indonesia’s export value in 2026 will decline due to the war between Israel and the United States (US) against Iran. Trade Minister Budi Santoso, alias Busan, stated that the export decline could occur if the warfare in the Gulf region countries prolongs. “At the very least, our export growth could be lower than last year,” Busan said when met at the Kemendag office in Jakarta on Friday (27/3/2026). As a result, exporters are facing a surge in transportation costs for commodities to destination countries. In addition, the warfare also requires shipments of products, especially to Gulf countries, to take alternative routes that are longer. “So now it’s longer because some ports are closed,” Busan said. Shipments to the Middle East continue despite higher logistics costs. “But as mentioned, the cost might be higher for transportation expenses,” Busan added. Although predicting a decline in export value, Busan is optimistic that Indonesia’s exports will still grow throughout 2026. This is because, amid the Middle East war, several commodities such as crude palm oil (CPO), nickel, tin, and coal are experiencing increases. Furthermore, the government will promote diversification or the broadening of exports to countries not affected by the war. He acknowledged that export diversification is actually a long-term agenda.