DBS Group Research economists Radhika Rao and Chua Han Teng have assessed Indonesia's economic resilience amid recent Middle East tensions, emphasizing that the country's growth outlook remains intact. According to their analysis, Indonesia's trade exposure to Iran has been negligible over the past six years, minimizing direct risks from the region [1]. Total trade with the broader Gulf region reached $17.8 billion, accounting for 3.4% of Indonesia's total trade in 2025, but significant economic buffers are in place [1]. Indonesia is actively strengthening its trade relationships through existing agreements and ongoing Comprehensive Economic Partnership Agreement negotiations with Kuwait, Bahrain, Oman, and Qatar [1].
Despite Indonesia being a net oil importer, its status as a net commodity exporter provides a counterbalance, suggesting that any negative impact on the trade balance could be mitigated if prices in the metals and minerals sector remain firm [1]. DBS maintains its current economic forecasts, citing a structural shift in energy subsidies—amounting to 0.8% of GDP last year—as a crucial cushion against external volatility [1].
DBS concludes that the direct impact of Middle East tensions on Indonesia's trade and economic growth appears marginal at this juncture, with diversified trade links and robust economic buffers supporting stability [1].
CONCLUSION
DBS Group Research sees Indonesia's growth outlook as stable despite Middle East tensions, citing negligible trade exposure to Iran and strong economic buffers. The country's net commodity exporter status and energy subsidy reforms are expected to cushion against external shocks, resulting in limited market impact.