Jakarta \u2014 Finance Minister Purbaya Yudhi Sadewa has stated his\nreadiness to expand the maximum budget deficit ceiling above 3% of gross\ndomestic product (GDP) if directly ordered by President Prabowo\nSubianto.<\/p>\n
The 3% GDP threshold currently represents the maximum deficit limit\nstipulated in the explanatory section of Article 12, paragraph 3 of Law\nNo.\u00a017 of 2003 on State Finance.<\/p>\n
\u201cI am simply the President\u2019s hand. If ordered, we will implement it,\u201d\nPurbaya said at his office in Jakarta on Friday, 13 March 2026.<\/p>\n
Nevertheless, Purbaya acknowledged that such a decision must consider\nfuture investor sentiment, particularly its potential impact on\ninternational rating agencies\u2019 assessments of Indonesia\u2019s credit rating\nand debt.<\/p>\n
\u201cThe consideration would be whether breaching that threshold would\ncause rating agencies to give a negative assessment,\u201d Purbaya\nstated.<\/p>\n
He argued that if global rating agencies that serve as benchmarks for\ninvestors acted fairly, a fiscal deficit expansion should not alter\ntheir assessment of Indonesia\u2019s debt rating. After all, the government\nhas consistently maintained its fiscal deficit below the State Finance\nLaw threshold.<\/p>\n
\u201cActually, if fairly assessed, our scaling is already slightly below\n3%, barely even. In fact, we perform better \u2014 we spend close to 3%\nwhilst our growth is faster than other countries,\u201d Purbaya said.<\/p>\n
He also emphasised that countries with economic capacity comparable\nto Indonesia, such as Vietnam and India, already maintain fiscal\ndeficits exceeding the 3% level, which is also adopted by European\ncountries under the Maastricht Agreement.<\/p>\n
\u201cPerhaps Vietnam\u2019s is higher than ours, at around 4%. India\u2019s is even\nhigher, at 5-6% deficit. So given that European countries are all\nalready higher, and then America, South Korea, Japan \u2014 based on these\nfigures alone there should be no issue,\u201d Purbaya stated.<\/p>\n
Before deciding on deficit expansion, Purbaya emphasised that the\ngovernment will conduct a deeper examination of how global rating\nagencies assess countries and what factors beyond deficit influence\ntheir evaluations.<\/p>\n
\u201cThey look at things differently from how we see it, and that is what\nwe are currently studying. But what is clear is that for now we will\nimplement fiscal policy carefully,\u201d Purbaya said firmly.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/budget-deficit-ceiling-above-3-purbaya-awaits-presidential-order-1773384753", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }