Jakarta. Indonesia is set to announce a series of austerity measures on Tuesday aimed at mitigating the impact of rising global geopolitical tensions, as the government moves to protect domestic economic stability and energy resilience.

The planned announcement comes amid growing concerns over the escalating conflict involving the United States, Israel, and Iran in the Middle East and its potential spillover effects on Southeast Asia’s largest economy. Officials say the measures are designed to cushion the impact on key sectors, including energy, fiscal management, and public services.

Indonesia is seeking to keep its budget deficit below the statutory 3% of gross domestic product (GDP) as a sharp rise in global oil prices caused by the closure of the Strait of Hormuz threatens to widen fiscal pressures. The 2026 state budget was drafted on an assumption of $70 per barrel for crude oil, but Brent crude has hovered near $100 in the past month.

To contain spending, the government is mulling austerity measures that include restrictions on non-essential official travel and meetings, as well as broader cuts to operational expenditures. Officials have also floated the possibility of reducing ministers’ salaries. Other policies under consideration include the implementation of work-from-home (WFH) arrangements in selected sectors, adjustments to state spending to maintain fiscal flexibility, and an acceleration of alternative energy programs, including the expansion of the B50 biodiesel mandate.

The initiatives are part of a broader strategy to strengthen national resilience as global uncertainty deepens, with policymakers seeking to balance economic stability and energy security.

“The government sees the need for a swift and measured response to maintain domestic stability while anticipating further impacts from global geopolitical developments,” a government source familiar with the plan said.

Home Affairs Minister Tito Karnavian earlier signaled that a once-a-week WFH policy would likely be introduced as part of energy-saving measures, as external pressures weigh on global supply chains and fuel markets.

“Just wait, it will most likely be officially announced tomorrow. I don’t want to get ahead of it,” Tito told reporters at the parliamentary complex in Senayan, Jakarta, on Monday.

He added that the government is finalizing the details of the policy, urging the public to await the official announcement.

Indonesia has, in recent years, expanded its use of biofuels to reduce dependence on imported energy, with the B50 program — a 50% palm oil-based biodiesel blend — expected to play a larger role in the country’s energy mix.

Analysts say the combination of fiscal adjustments, remote working arrangements, and energy diversification reflects Jakarta’s increasingly proactive stance in navigating global volatility, particularly as geopolitical risks continue to reshape trade flows, commodity prices, and investment patterns.

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