good crabVietnamese crab exporterdouble-skinned crabs

Indonesia to Unveil Austerity Measures as Oil Hits $100

Bambang Ismoyo
March 31, 2026 | 10:51 am
SHARE
President Prabowo Subianto leads a meeting with several ministers at his private residence in Bogor, West Java, Sunday, Jan. 11, 2026. (Photo courtesy of the Cabinet Secretariat)
President Prabowo Subianto leads a meeting with several ministers at his private residence in Bogor, West Java, Sunday, Jan. 11, 2026. (Photo courtesy of the Cabinet Secretariat)

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.

ADVERTISEMENT

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.

Tags: Keywords:
Google Add Investor.id as a preferred source on Google +
SHARE

Related Articles


News Aug 18, 2026 | 12:52 pm

Trump Threatens to Bomb Oman if It 'Gets in the Way' of Iran Deal

Trump threatened to bomb Oman if it obstructs a US-Iran deal on the Strait of Hormuz as pressure mounts to end the war.
News Aug 4, 2026 | 1:58 pm

Indonesia Keeps Work-From-Home Policies for Gov't Workers

Indonesia is keeping its work-from-home policies for government workers this month, citing its effects on digital transformation.
Business Jul 31, 2026 | 9:07 am

Indonesian Stocks Advance as Wall Street Surge Offsets Budget Concerns

Indonesian stocks rose 0.54% as a Wall Street tech rally and new 40-year mortgage policy outweighed budget allocation concerns.
Business Jul 27, 2026 | 9:01 am

Indonesia Stocks Slip as BI Governor Perry Warjiyo Steps Down

Indonesian stocks opened lower as investors weighed budget preparations for higher oil prices and awaited the Fed this week.
Business Jul 20, 2026 | 4:06 pm

Indonesian Stocks Rise Nearly 1% on Foreign Inflows, BI Hike Expectations

JCI rose 0.91% as foreign investors returned, strong manufacturing data boosted sentiment, and markets awaited BI's policy meeting.
News Jul 9, 2026 | 1:11 pm

Thousands Join Funeral Processions for Iran's Late Supreme Leader in Iraq

Thousands gather in Iraq's holy cities to honor Ayatollah Ali Khamenei as chaotic scenes unfold during funeral processions.
Business Jul 8, 2026 | 8:51 pm

IMF Cuts 2026 Global Growth Forecast to 3% as Iran War Fuels Energy Shock

The IMF cut its 2026 global growth forecast to 3%, citing the Iran war's energy shock, while AI investment helps cushion the impact.
Business Jun 22, 2026 | 7:26 pm

Indonesia Sets Zero Import Duty for LPG, Plastic Input

Indonesia sets zero import duties for plastic inputs and LPG used by the petrochemical industry.
News Jun 15, 2026 | 12:56 pm

US, Iran Reach Interim Deal Aimed at Ending War

The US and Iran reach an interim deal aimed at ending the war and reopening the Strait of Hormuz.
News May 26, 2026 | 2:44 pm

Govt Extends Weekly WFH Policy After Fuel Use Drops 9%

The government says once-a-week remote work helped cut subsidized fuel consumption as energy costs remain volatile.

The Latest


News 5 hours ago

Court Hears of $5,000 Fee for Expedited Hajj Slots in 2023

A former Religious Affairs Ministry staffer testified that 181 pilgrims paid $5,000 each for expedited hajj departures in 2023.
News 6 hours ago

Five Journalists Reported Missing While Covering Anak Krakatau Eruption

Five journalists and two boat crew members are missing after losing contact while covering the Anak Krakatau eruption off Banten.
Business 7 hours ago

Trump Tariffs Cripple EU Firms’ Confidence in ASEAN

As many as 81% of the surveyed European businesses admit that the US tariffs had weakened their confidence in ASEAN.
Business 10 hours ago

Rupiah Strengthens to Rp17,632 on Reserve Boost

The rupiah rose 0.05% to Rp17,632 as higher foreign exchange reserves offset geopolitical risks and US inflation concerns.
Business 11 hours ago

Stocks Climb 1% as Indonesia’s Reserves, Airport Operations Recover

Indonesian stocks rose 1% as stronger foreign reserves and airport reopenings lifted domestic market sentiment.
COPYRIGHT © 2026 JAKARTA GLOBE. ALL RIGHTS RESERVED