Indonesia's general budget recorded a deficit of 379.3 trillion rupiah ($20.81 billion) during the period from January to October 2026, equivalent to 1.47 percent of GDP, according to what Indonesian Finance Minister Suhasil Nazara announced on Friday.
Nazara explained that public revenues amounted to 2.618 trillion rupees during the first ten months of the year, an increase of 24 percent year-on-year, while total spending rose to 2.997 trillion rupees, an increase of nearly 16 percent compared to the same period last year, according to Reuters.
The government expects the budget deficit to reach 2.85 percent of GDP during the entire year 2026, unchanged from its expectations issued last July, according to the minister.
In details of spending, the government spent 415.8 trillion rupees on fuel subsidies, electricity, fertilizers and microloans during the aforementioned period, an increase of 32 percent year on year. Expenditures allocated to President Prabowo Subianto's flagship program to provide free school meals amounted to 173.2 trillion rupiah.
For his part, Director General of Budget at the Ministry of Finance, Sudarto, said that the government is still allocating 500 trillion rupiah to support energy over the course of 2026, but is open to increasing this amount to keep fuel prices unchanged.
Regarding deficit financing, Nazara pointed to a recovery in applications submitted during the most recent regular government bond auction, as well as recording good demand for bonds denominated in foreign currencies, which reflects investor confidence.
The government relies mainly on issuing rupee-denominated bonds to finance the budget deficit, in addition to issuances in foreign currencies, including the US dollar, the euro, the Japanese yen, and the Chinese yuan, during the current year.
Copper prices rose slightly today, Friday, after a sharp selling wave in the previous session, but they remained on track to record a weekly loss, as concerns related to Nvidia and investments in artificial intelligence outweighed the support resulting from the scarcity of supplies in China, the largest consumer of the metal in the world.
Standard three-month copper contracts on the London Metal Exchange rose 0.68 percent to $13,680 per ton by 01:45 GMT, after falling to a four-month low of $13,515 per ton on Thursday, affected by concerns about artificial intelligence and the strength of the US dollar.
On the Shanghai Futures Exchange, the most widely traded copper contract rose 0.13 percent to 105,280 yuan ($15,783.16) per ton, according to Reuters.
Copper prices have fallen by 0.65 percent since the beginning of the week, as investors tend to be cautious about technology stocks and companies related to artificial intelligence, raising concerns about future spending on data centers, which are expected to constitute a growing source of demand for the metal.
These concerns came after the resignation of Nvidia CEO, Jensen Huang, on Thursday, which raised questions about the continued strength of demand related to artificial intelligence infrastructure.
Wider uncertainty about US policies after the midterm elections, and opposition to some new data center projects, also contributed to increased investor caution.
On the other hand, copper found some support from tight supplies in China, as the price premium for copper in the port of Yangshan, which is an indicator of Chinese demand for the imported metal, rose to a record level of $240 per ton as of Thursday.
But the local premium paid over copper futures prices on the Shanghai Stock Exchange fell to 775 yuan per ton as of Thursday, compared to a record level of 2,615 yuan on November 6.
As for other metals traded on the London Stock Exchange, aluminum fell by 0.18 percent, while zinc rose by 0.70 percent, lead by 0.21 percent, nickel by 0.10 percent, and tin by 0.96 percent.
On the Shanghai Stock Exchange, aluminum fell by 0.22 percent, zinc by 0.16 percent, while lead rose by 0.77 percent, nickel fell by 0.07 percent, and tin rose by 1.42 percent.
Goldman Sachs warns of risks threatening its expectations for copper prices
In a related context, Goldman Sachs said on Thursday that it sees risks tending to lower its expectations for the price of copper in 2027, amounting to $15,400 per ton, in the wake of the US midterm elections, attributing this to investor concentrations related to artificial intelligence and declining expectations regarding US customs duties.
The bank explained in a note that “the main risks facing our forecasts stem from investor concentrations and not from actual demand,” referring to the markets’ exposure to investments related to artificial intelligence.
He pointed out that investors have become more cautious about the artificial intelligence boom, amid fears that Democratic control of Congress will slow investments in this sector and the expansion of the establishment of data centers.
The bank added that copper may reach an average of about $14,600 per ton in 2027 if investor concentrations remain at their current levels.
He also indicated that declining expectations regarding tariffs threaten his assumptions regarding the accumulation of inventories in the United States, but he pointed out that Democratic control of Congress does not mean that the risks of tariffs have disappeared.
Goldman Sachs estimated that the average price of copper will reach about $14,500 per ton in 2027, with the possibility of recording lower levels if the majority of the stocks collected in the United States during the current year return to global markets.
The dollar stabilized near its highest levels in 19 months, today, Friday, on track to record its largest weekly gains in two months, with increasing investor bets on a larger hike in US interest rates, which pushed Treasury bond yields higher and brought the Japanese yen back to the level of 160 yen to the dollar, which raises fears of Japanese authorities intervening to support the currency.
US Treasury bond yields rose after US President Donald Trump's statements, in which he said that the United States does not need an agreement with Iran, raised concerns about oil supplies from the Middle East, which pushed crude prices up and boosted inflation expectations. This came to add pressure to the concerns raised by this week’s data about the continuation of US inflation at high levels, which prompted investors to evaluate the possibility of the Federal Reserve (the US central bank) resorting to raising interest rates by a larger amount than usual next month, according to Reuters.
Two-year US Treasury bond yields rose by 34 basis points during the past two sessions, recording their largest increase in two days in three and a half years, reaching 4.8602 percent in the latest trading.
The euro rose 0.1 percent to $1.1059, remaining above its lowest level against the US currency since April 2025. But it is heading for a weekly decline of 0.7 percent, which is the largest since late September.
Federal Reserve officials warned this week that US inflation would continue at high levels, while some of them expressed a willingness to consider raising interest rates by 50 basis points if price pressures did not ease. Data from the CME Group's Fed Watch tool showed that traders estimate the probability of raising interest rates at this rate next month at about 14.5 percent, up from zero percent last week.
Investors are also monitoring the turmoil in technology company stocks, following the departure of NVIDIA CEO Jensen Huang, at a time when the sector is facing pressures related to financing and regulatory concerns.
Carol Kong, currency strategist at Commonwealth Bank of Australia, said: “If we see a further sharp decline in stock markets, this could put negative pressure on the US dollar.”
She added that the strong momentum of the US currency may continue in the near term, especially with anticipation of the statements of Federal Reserve officials next week, noting that any additional signals that support raising interest by 50 basis points may give the dollar more gains.
The dollar index, which measures the performance of the US currency against a basket of major currencies, reached 103.18 points, stable near its highest level since April 2025. The index is heading for weekly gains of 0.9 percent, the largest since September.
The yen is under pressure from intervention fears
The Japanese yen stabilized at 159.89 against the dollar, remaining close to its weakest levels since the beginning of September, amid mounting fears of Japanese authorities interfering in the exchange market. The Japanese currency fell by 0.9 percent during the week, on track to record its largest weekly loss since September.
Japanese Finance Minister Satsuki Katayama said on Friday that the government will take appropriate measures to deal with currency market fluctuations, after the yen briefly touched the level of 160 yen to the dollar on Thursday.
Japan spent 15.4 trillion yen ($96.47 billion) to support its currency, after it fell to its lowest level in four decades at 163.99 yen to the dollar in late July.
Analysts at Mitsubishi UFJ (MUFJ) said in a note that the repricing of US interest rate expectations towards further tightening has widened the difference in interest rates between the United States and Japan, currently exceeding the support provided by expectations of continued normalization of the Bank of Japan’s monetary policy.
They added that the dollar's approach to the 160 yen level makes the risk versus return less attractive for investors who bet on further rise in the dollar and yen pair.
The Australian dollar fell by about 2.5 percent over the past month, making it the worst performer among the major G10 currencies against the US dollar, and the only currency within the group in which markets price the possibility of lowering interest rates next year. The Australian dollar reached $0.6802.
The dollar was largely stable against the Swiss franc at 0.835 francs, approaching its highest level in a month.
In energy markets, oil prices varied on Friday, but were heading for the second weekly loss in a row. Brent crude futures settled at $95.79 per barrel, while West Texas Intermediate crude fell by 0.4 percent to $88.38.
In the cryptocurrency market, Bitcoin fell by 4 percent to $68,587, falling below the main $70,000 level and recording its lowest levels since August. Ethereum also fell by more than 4 percent to $1,925.59.
