Indonesia's Economy at Risk from Rising Oil Prices and Middle East Conflict
The Middle East conflict is threatening to ripple through Indonesia's economy, according to economists Ahamed Kameel Meera and Anas Iqtait. Brent crude prices have climbed to around $108 per barrel, while Indonesia's Crude Price (ICP) has risen to $89.43 per barrel in August from $81.68 in July.
As a net energy importer, Indonesia would be particularly exposed to higher oil prices, which could raise costs across industries and push up fertilizer and food prices, Ahamed warned at the 5th International Conference on Muslim World Economy and Business.
The potential chain reaction from higher energy costs could lead to inflation, weaker exports, currency depreciation, higher external debt burdens, fiscal pressure, lower investment, slower economic growth, and ultimately weaker employment, Ahamed said.