Purbaya: Easing US-Iran Conflict Could Reduce Subsidy Burden

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa believes that the easing of the conflict between the United States and Iran has the potential to positively impact the State Budget (APBN), particularly regarding the management of energy subsidies.

Purbaya explained that the government had previously anticipated the risk of global energy price volatility by allocating a portion of the budget to subsidy requirements. If geopolitical tensions subside and energy prices become more stable, the required subsidy budget is expected to decrease.

“We have already set aside part of the budget for subsidies,” said Perdapat Purbaya when met at the Senayan Parliament Complex, Jakarta, on Monday.

According to him, the reduction in energy subsidy needs could open up greater fiscal space to support the government’s priority programmes.

“As a result, the (subsidy burden) will be significantly reduced, providing room to finance other programmes deemed important by the President. Therefore, we will monitor the developments and then make adjustments accordingly,” he added.

Nevertheless, the government will continue to closely monitor global developments and their impact on the national economy before making further adjustments to the state budget structure.

Meanwhile, the Indonesian Ministry of Foreign Affairs (Kemlu RI) welcomed reports regarding the achievement of a peace agreement between the United States and Iran, expressing hope that the de-escalation of conflict in the region can be realised.

“This is a positive development towards a peaceful resolution of the conflict and the creation of peace, security, and stability in the region,” stated the Indonesian Ministry of Foreign Affairs via the social media platform X on Monday.

Previously, US President Donald Trump announced that an agreement with Iran had been finalised, stating that the Strait of Hormuz would reopen and the US naval blockade would be lifted.

On the other hand, the Iranian government also confirmed that a peace agreement with the United States had been reached. Iranian Deputy Foreign Minister Kazem Gharibabadi stated that the memorandum of understanding had been finalised and is scheduled to be signed in Switzerland on 19 June.

He noted that the agreement includes the cessation of military operations across all fronts, including in Lebanon.