JakartaPost-Apr 16, 2024
Further escalation in the Middle East conflict could pose multi-layered economic risks to Indonesia, ranging from further capital outflows to weaker gross domestic product (GDP) growth, according to analysts and some former government officials. Speaking at an online event held by the Eisenhower Fellowships on Monday, former Finance Minister Bambang Brodjonegoro said Indonesia’s economic growth this year could end up between 4.6 and 4.8 percent if further escalation occurred, short of the government’s target of 5.2 percent. “Perhaps, if the escalation is more severe and longer […] maybe the 5 percent target will be challenging,” Bambang said. Iran launched over 200 drones and missiles in a military strike on Israel late on Saturday, AFP reported, in retaliation for an Israeli attack on an Iranian consulate building in Damascus on April 1. In response, Finance Minister Sri Mulyani Indrawati held a meeting on Sunday discussing the global economic and financial situation amid the heightened geopolitical tensions. Coordinating Economic Minister Airlangga Hartarto said in a press statement on Monday that the government would “not stand still” and emphasized that market trust in Indonesia “must be maintained”. He also urged market players to “remain calm and not take speculative steps”. University of Indonesia (UI) Faculty of Economics dean Teguh Dartanto said that Indonesia would have to take “anticipatory measures” to prevent inflation, as well as simulate and analyze fiscal resilience against increasing global oil prices and a weaker rupiah. Read more at: https://www.thejakartapost.com/business/2024/04/16/mideast-escalation-could-pose-major-economic-risk-to-ri.html.
