Indef: Middle East conflict could cut Indonesia GDP 0.21%
If oil rises 30% above the 70 U.S. dollars a barrel baseline, consumer prices could rise 0.28%, real wages fall and energy imports jump 7.8%.
Institute for Development of Economics & Finance (Indef) estimates Indonesia's economic growth could slow by 0.21% if the Middle East conflict continues through the end of 2026 and drives a surge in global energy prices. In a computable general equilibrium model simulation presented by Indef Program Director Eisha M. Rachbini in Jakarta, the scenario assumes world oil prices rise 30% from a baseline of 70 U.S. dollars per barrel. The impact would push the consumer price index up 0.28%, cut real wages 0.26%, shrink exports 2.44%, and lift imports 7.80% because of energy needs and costs. Indef also projects investment would still rise 1.20%, but not enough to offset the slowdown in growth.