Antara News·Indonesia·Thursday, October 8, 2026 at 11:11 AM UTC

State Budget flexible to face geopolitical turmoil: Finance Minister

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Bayu Saputra, Yashinta Difa

Jakarta (ANTARA) - Indonesia’s State Revenue and Expenditure Budget (APBN) is designed to operate flexibly as an economic shock absorber against global geopolitical volatility and commodity price fluctuations, Finance Minister Suahasil Nazara affirmed.

Suahasil emphasized that while the State Budget is enacted by law, its implementation must remain adaptable to protect the domestic economy from external pressures, including military conflict between the United States and Iran.

"The State Budget must be run quite flexibly, because it must be able to adapt to changing world conditions," Suahasil told reporters here on Thursday.

“Global situations changed, geopolitical tensions emerged—suddenly America and Iran are at war, suddenly there are natural disasters, or sudden volatility in commodity prices,” he added.

Suahasil explained that key fiscal instruments—such as energy subsidies and compensation, fertilizer subsidies, social protection programs, as well as infrastructure spending—are regularly deployed to buffer the public and market from global shocks.

However, the minister underlined that budget flexibility must strictly adhere to regulatory standards and sound fiscal management.

"Flexible, but with good governance," he stated, noting that fiscal adjustments are systematically calculated against key macroeconomic indicators, such as international crude oil prices.

Addressing the current 2026 fiscal framework, Suahasil noted that the government continuously recalibrates fiscal projections to reflect real-time economic developments.

Mid-year evaluations in June demonstrated improved revenue outlooks supported by elevated commodity prices and the optimal performance of the Coretax administration system, allowing for increased state spending and a managed deficit adjustment.

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