Trade Minister: Prolonged Global War Could Suppress Exports

Trade Minister Budi Santoso stated that prolonged global geopolitical conflicts could suppress Indonesia’s export growth, although demand from international markets remains relatively stable. Speaking at the Ministry of Trade office in Jakarta on Friday, Budi noted that the primary impact of the current conflicts is not yet evident in product demand but is more pronounced in the international trade logistics and distribution chain. However, if the conflicts do not end soon, they risk restraining the pace of national export growth compared to the previous year’s achievements. “Of course, if this (war) doesn’t end, for example, if it continues indefinitely, it could affect our exports. At the very least, our export growth could be lower than last year. But hopefully, it ends quickly,” said Budi. He explained that the rise in global oil prices is causing increased transportation costs, while the closure of several international ports is forcing businesses to take longer shipping routes. “Yesterday, we also communicated with exporters. According to them, it is still meeting actual demand. Exports to the Middle East are still ongoing. But as mentioned, the costs might be higher for transportation expenses,” Budi stated. The government remains optimistic that Indonesia’s foreign trade performance will stay positive. According to him, this is supported by the increase in prices of several flagship commodities such as crude palm oil (CPO) and coal, which had previously experienced price declines. In addition, the government is preparing mitigation measures through export market diversification to reduce dependence on certain regions. “If we have opportunities there, it means we can take advantage of those opportunities well; we can actually enter those markets, such as South American markets or RCEP countries, then Southeast Asia and Latin America,” he explained. He added that the government is continuously monitoring global developments before setting more detailed export growth projections, while hoping that international conflicts can soon subside so that global trade returns to stability. Meanwhile, Budi mentioned that Indonesia’s exports to the Middle East in 2025 reached $9.87 billion or the equivalent of Rp167 trillion. Meanwhile, total Indonesian exports to Iran reached $250 million. Indonesia’s main export commodities to Iran include fruits worth $86.4 million, vehicles and parts worth $34.1 million, as well as animal and vegetable fats and oils worth $22 million.