The recent military strike by Iran on Israel has heightened tensions in the Middle East and poses multi-layered economic risks to Indonesia. According to analysts and former government officials, if further escalation occurs, Indonesia’s economic growth this year could end up between 4.6 and 4.8 percent, falling short of the government’s target of 5.2 percent.
The strike marks the first direct attack Iran has launched on Israel in their decades of contestation, adding to the already volatile situation in the region. In response, Finance Minister Sri Mulyani Indrawati held a meeting to discuss the global economic and financial situation and urged market players to remain calm and refrain from taking speculative actions. This comes as the government aims to navigate through potential economic risks posed by the Middle East conflict.
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