Purbaya: Easing US-Iran Conflict Could Reduce Subsidy Burden

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa assesses that the easing of the conflict between the United States and Iran has the potential to positively impact the State Budget (APBN), particularly in terms of managing energy subsidies. Purbaya explained that his ministry had previously anticipated the risk of global energy price fluctuations by setting aside a portion of the budget for subsidy needs. If geopolitical tensions ease and energy prices become more stable, the budget requirement for subsidies is expected to decrease. “Previously, we had already set aside part of the budget for subsidies,” Purbaya said when met at the Parliament Complex in Senayan, Jakarta, on Monday. According to him, the reduced need for energy subsidies could open up greater fiscal space to support the government’s priority programmes. “Thus, the subsidy burden will be greatly reduced, and there will be room to provide financing for other programmes deemed important by the president. So we will see how things develop, and then we will adjust accordingly,” he stated. Nevertheless, the government will continue to monitor global conditions and their impact on the national economy before making further adjustments to the APBN posture. Meanwhile, Indonesia’s Ministry of Foreign Affairs welcomed reports of a peace agreement between the United States and Iran and expressed hope for de-escalation in the region. “This is a positive development towards a peaceful resolution of the conflict and the creation of peace, security, and stability in the region,” the ministry stated via social media platform X on Monday. Previously, US President Donald Trump announced that a deal with Iran had been completed, stating that the Strait of Hormuz would be reopened and the US naval blockade lifted. On the other side, the Iranian government also confirmed that a peace agreement with the United States had been reached. Iranian Deputy Foreign Minister Kazem Gharibabadi stated that a memorandum of understanding had been finalised and was scheduled to be signed in Switzerland on 19 June. He said the agreement includes a cessation of military operations on all fronts, including in Lebanon.