Iran Conflict: Oil Price Volatility Won’t Trigger Global Recession, Indonesian Finance Minister Says

Jakarta, CNBC Indonesia – Indonesian Finance Minister Purbaya Yudhi Sadewa believes the ongoing conflict in the Middle East involving Iran, the United States, and Israel, which has caused fluctuations in global oil prices, will not result in a global economic recession.

He stated that the leadership driving the conflict is currently facing internal pressures and is therefore likely to accept steps to stabilize oil prices. He specifically identified U.S. President Donald Trump as a key figure in this potential stabilization effort.

“Let’s observe the situation. America is already experiencing difficulties, with fuel prices increasing by almost 100% and public discontent rising. This is why President Trump’s approach is shifting,” Purbaya explained at his office in Jakarta on Wednesday, March 25, 2026. “The price could potentially reach $150, but that would be detrimental to the U.S., not to us.”

Indonesia’s Economic Resilience

Regarding Indonesia, Purbaya expressed confidence in the country’s ability to maintain domestic economic stability, even with oil prices exceeding the 2026 state budget (APBN) macro assumption of $70 per barrel. “If we can maintain this stability,” he said.

Purbaya voiced his frustration with economic observers who have predicted a recession in Indonesia in the coming months. He argued that these predictions are often motivated by a desire to create negative sentiment rather than offering constructive criticism of the government’s policies.

“I am not against criticism, but I object to statements predicting the collapse of the Indonesian economy within two months and an impending recession,” Purbaya stated.

Critique of Recession Predictions

Purbaya further criticized the basis of these recession predictions, arguing they are often flawed. He asserted that economists predicting economic ruin are solely focusing on the impact of rising oil prices due to the Middle East conflict.

“Their reasoning is that oil prices will reach $200 per barrel and the rupiah will depreciate significantly. If that were to happen, the entire world would be in recession, so there’s no demand for alarm,” Purbaya explained. “The underlying assumptions are unrealistic, and these economists are incorrect.”

Purbaya emphasized that a proper economic risk assessment should consider all factors, including historical data and government policies implemented in response to global pressures. “Economists should conduct thorough calculations and avoid arrogance. If they lack understanding, they should revisit their education, especially if they hold a professorship,” he added.

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