Airlangga Preps to Mitigate Economic Impact of Iran-Israel Conflict

TEMPO.CO, Jakarta - Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto affirmed that his side has conducted a meeting to anticipate the potential impact of Iran's attack on Israel on the country’s economy.

“We hope for de-escalation of the situation, but as the economic sector office, we have to prepare for various global shocks,” Airlangga said at his office in Central Jakarta on Tuesday, April 16.

Iran launched attacks on Israel on Saturday night, April 13, in retaliation for the bombing of its consulate building in Syria. This incident has had a detrimental effect on the global economy, particularly in Asia. 

Asian stocks weakened and gold prices rose on Monday, April 15, as risk sentiment took a hit after Iran's retaliatory attack on Israel sparked fears of a wider regional conflict, keeping traders on edge.

Airlangga argued that Indonesia needs to pay more attention to global factors that can affect the country's economy. He alluded to the global shock between Russia and Ukraine, which is still unfolding, not to mention the ongoing conflict in Gaza.

The chairman of the Golkar Party also said that President Joko Jokowi Widodo has reminded the cabinet to exercise self-restraint, especially in relations with the Middle Eastern countries. Jokowi also instructed ministers to anticipate various domestic challenges, especially regarding subsidies in various sectors.

“Related to the subsidies, we need to recalibrate the budget used,” Airlangga added. Despite the challenges, he remained optimistic that the government would still be able to maintain the economy this year, particularly with respect to the inflation rate, interest rates, and capital.

During the 2024 Eid al-Fitr holiday, the rupiah exchange rate against the US dollar continued to fall. It was recorded at Rp15,887 on April 6 and depreciated to Rp16,094, the lowest level in the past four years, when the dollar reached Rp16,373 on April 3, 2020.

RIANI SANUSI PUTRI

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