Indonesia: Geopolitical tensions could fuel inflation risks – UOB

Enrico Tanuwidjaja, Economist at UOB Group. comments on the impact of the ongoing Russia-Ukraine conflict on Indonesian GDP and inflation.

Key Takeaways

“Russia-Ukraine ongoing tensions will have a very limited direct trade impact to Indonesia.”

“However, higher oil prices and correspondingly fuel prices as well as some basic raw food items could result into significant inflationary pressures if tension is prolonged.”

“Higher commodity prices, though bode well for exports and subsequently growth, may likely be capped by the growth-offsetting impacts from higher inflation effect on consumer spending.”