Indonesia’s fiscal outlook could face additional pressure if global oil prices remain above USD 100 per barrel, with analysts estimating the budget deficit could approach 4% of gross domestic product (GDP). Rising oil prices, driven by geopolitical tensions and global supply disruptions, may significantly increase the government’s energy subsidy burden because Indonesia remains a net importer of petroleum products.

Economists noted that higher oil prices would directly impact state spending, particularly through fuel subsidies and energy compensation programs designed to maintain affordable fuel prices for households. Indonesia’s 2026 state budget currently assumes an oil price benchmark of around USD 70 per barrel, meaning sustained prices above that level could widen the fiscal gap. However, policymakers still have room to implement adjustments and maintain fiscal discipline if energy prices remain elevated.
Source:
https://jakartaglobe.id/business/indonesias-budget-deficit-to-near-4-of-gdp-if-oil-prices-top-100