Since the pandemic, Indonesia has delivered steady annnual growth of 5%. Then, Iran closed the Strait of Hormuz.
As Southeast Asia's largest economy still heavily relies on imported fuel despite having its own oil reserves, the Indonesian government took an immediate hit.
The cost of fuel subsidies, for which ministers had budgeted around $22 billion (€19.2 billion), rocketed. Reuters news agency reported in March that policymakers would need an extra $6 billion or more to keep prices stable.
The national currency, the rupiah, plunged 8% to record lows near 18,000 to the dollar. The Jakarta stock market, which had been heading for a record above 9,000, fell by a third, becoming the worst performing stock market this year.
Foreign investors pulled billions out of Indonesian assets. The Financial Times calculated that global funds sold a net $3.9 billion worth of stocks this year — the largest sell-off since just before the 1997-98 Asian Financial Crisis.
