Indonesia's senior economic minister, Airlangga Hartarto, warned Friday that sustained high global oil prices could force the nation to breach its mandated fiscal deficit limit of 3% of GDP.
Hartarto stated that if oil prices remain elevated due to the ongoing Middle East conflict, the government might consider imposing additional taxes on key commodities like palm oil, nickel, gold, and copper. Austerity measures are also being considered to mitigate the impact.
Government modeling indicates that under various high oil price scenarios, the fiscal deficit could exceed 3% and potentially surpass 4% of GDP, impacting economic growth. Oil prices have continued to climb, with Brent futures trading above $100 a barrel.