The Government is Wary of the Economic Impact Due to the Prolonged Conflict between Iran and Israel

REPUBLIKA.CO.ID, JAKARTA — The government stated that the current geopolitical conditions, especially regarding the turmoil in the Middle East region, have had a real impact on the global economy. This will also have an impact on efforts to maintain national economic growth.

Coordinating Minister for Economic Affairs Airlangga Hartarto also emphasized that he continues to monitor all existing developments. At the same time preparing various efforts to mitigate all potential risk impacts that may arise.

“In principle, de-escalation or restraint is very important. “Especially towards the countries involved there,” said Airlangga to journalists in Jakarta, Tuesday (16/4/2024).

From an economic perspective, he said, the government saw a spike in oil prices due to the Israeli attack on the Iranian embassy in Damascus and also the retaliation carried out by Iran. From an economic perspective, he continued, the Red Sea and the Strait of Hormuz are important, especially because there are 33 thousand oil ships in the strait and around 27 thousand in the Red Sea.

“Enhancement freight costs “That is one of the things that must be mitigated,” he said. D

Even so, Airlangga also said that fundamentally, the Indonesian economy is currently growing solidly at around five percent, with inflation in the range of 2.5 plus or minus 1 percent.

Indonesia’s trade balance is also still experiencing a surplus and foreign exchange reserves have reached around 136 billion US dollars. Then from a financial market perspective, the dollar index strengthened amid the release of United States economic data showing strengthening.

Airlangga explained that escalation increases uncertainty and what must be mitigated is the transfer of assets to safe haven such as dollars and gold. “The exchange rate and stock price index also weakened globally. However, Indonesia was compared peer countries “It’s still relatively safe,” he said.