Indonesia faces fiscal squeeze as Iran war drives up oil prices
South China Morning Post
by Resty Woro YuniarMarch 6, 2026
Indonesia could face a sharp fiscal squeeze if the US-Israel war on Iran pushes oil prices higher, analysts warn, as this risks inflating the country’s fuel subsidy bill at a time when global ratings agencies and investors are already scrutinising Jakarta’s budgetary discipline.
A prolonged war could force policymakers into a difficult choice: maintain fuel subsidies and risk breaching the legal deficit ceiling – potentially unsettling investors further – or cut funding to keep the budget within...
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Originally published on South China Morning Post on 3/6/2026