Airlangga Outlines Risk of Oil Price Surge on State Budget, Deficit Potentially Exceeds 4 Per Cent

JAKARTA – The Coordinating Minister for Economic Affairs, Airlangga Hartarto, presented several scenarios detailing the impact of rising global oil prices on the State Budget and Expenditure (APBN).

According to Airlangga, if these scenarios are factored into APBN calculations, the budget deficit has the potential to widen beyond the 3 per cent limit.

“In other words, with these various scenarios, maintaining an APBN deficit of 3 per cent will be difficult unless spending is cut, which will also impact economic growth,” Airlangga said during a plenary session at the State Palace on Friday, 13 March 2026.

The rupiah exchange rate is assumed to be around Rp 17,000 per US dollar, higher than the APBN assumption of Rp 16,500 per US dollar.

With this assumption, along with economic growth of 5.3 per cent and government bond yields of around 6.8 per cent, the APBN deficit is estimated to reach 3.18 per cent.

In the moderate scenario, oil prices are estimated to be around 97 US dollars per barrel. The rupiah is assumed to weaken to approximately Rp 17,300 per US dollar.

Under these conditions, economic growth is estimated to be around 5.2 per cent with government bond yields of around 7.2 per cent. The budget deficit in this scenario is estimated to increase to 3.53 per cent.

In the pessimistic scenario, oil prices are estimated to reach 115 US dollars per barrel. The rupiah is assumed to weaken to approximately Rp 17,500 per US dollar.

“These are several scenarios that we may need to discuss in a limited session,” Airlangga said.

The government believes that the possibility of widening deficits needs to be anticipated through various fiscal policies should oil price increases actually occur.