Revealed! Each US$1 Rise in Oil Price Costs Rp6.8 Trillion

Jakarta — CNBC Indonesia reported that Deputy Finance Minister Juda Agung said the Finance Ministry regularly conducts stress tests on various global scenarios, including oil-price increases and potential rupiah weakness. He said that in the financial notes, the government also includes sensitivity analyses against various macro indicators. So far, Juda explained, every US$1 increase in the Indonesian Crude Price (ICP) could widen the deficit by around Rp6.8 trillion. Meanwhile, a depreciation of Rp100 against the US dollar would affect the deficit by about Rp800 billion, and a yield increase of 0.1% could add roughly Rp1.9 trillion in burden. Nevertheless, the stress-test results on the scenario deemed plausible show the deficit remains under control. “The stress-test we conducted on a scenario that is quite plausible shows that the deficit remains under 3 per cent of GDP, debt over GDP also remains under control,” said the Deputy Finance Minister at the Indonesia Economic Forum 2026 held in Jakarta, Monday (2/3/2025). On the financing side, Juda revealed the Finance Ministry continues to diversify funding sources to strengthen fiscal resilience. If previously global financing was dominated by the US dollar, now the government broadens its investor and currency base. “Last week we, the Ministry of Finance, just issued global bonds amounting to US$4.5 billion equivalent but in Euro and Renminbi. And its price is still very good, the yield is still very good. For Renminbi between 2-3% and for Euro 4-5%. This size is still very good for our global market,” he said. On the investment side, the government has included foreign investment projections in the growth scenario. In addition, the role of domestic investment is now strengthened through a new government entity, Danantara. “Danantara now has an important role. If in the past government investments ended up in the APBN, now they are in Danantara. Danantara is now part of Indonesia’s macroeconomic management,” explained Juda. Juda explained that currently the government is focusing the APBN expenditure on government consumption and improving the welfare of the people, especially the lower-middle class. Meanwhile, investment financing is increasingly done through Danantara and support for foreign investment. With these various instruments, he is optimistic that the balance between revenue and expenditure will be maintained amid the uncertain global dynamics. (haa/haa)