These Are the Reasons Purbaya Is Confident the Indonesian State Budget Will Withstand the Effects of Iran's War

Jakarta, CNBC Indonesia — Finance Minister Purbaya Yudhi Sadewa says that Indonesia’s fiscal resilience remains reasonably strong amid global shocks caused by the war raging in the Middle East. Purbaya said that from simulations prepared by the Ministry of Finance, the prospect of a protracted crisis stemming from cross-border conflicts in the region would not push the APBN into deficit pressure or cause it to buckle, particularly in bearing the burden of fuel subsidies as oil prices rise.

‘If our analysis at present shows that things are still quite good, there is no problem. Because our tax collection is also improving; January–February growth was 30 per cent. That is an extremely significant figure; it means there is a significant improvement in the economy and in people’s behaviour, taxes and customs,’ Purbaya said after a gathering and discussion following the iftar during Ramadan, quoted on Wednesday 4 March 2026.

In a separate statement, Deputy Finance Minister Juda Agung emphasised that Indonesia’s APBN structure is designed to be robust to respond to global volatility, including geopolitical escalation that could push oil prices higher and trigger pressure in financial markets. He said the APBN is designed around three core principles: prudent, disciplined, and flexible.

‘Our APBN is designed with three principles: prudent, disciplined, and flexible. Prudent and disciplined, we ensure that the deficit remains below 3 per cent. The debt-to-GDP ratio is around 40 per cent—well below the legally mandated 60 per cent,’ Juda said on Monday 2 March 2026.

Juda explained that the flexibility aspect provides room for the government to use fiscal buffers in facing global shocks, affecting both expenditure and state revenue.

‘Flexibility means that if shocks originate from global sources, there is a buffer—a fiscal reserve that can be used to cushion those upheavals,’ Juda said.