Budget Committee Responds to Deficit Expansion Beyond 3 Per Cent of GDP

JAKARTA — Said Abdullah, Chair of the House of Representatives Budget Committee, has responded to reports regarding a deficit expansion beyond 3 per cent of GDP and quantitative easing policies.

“To my knowledge in the Budget Committee of the House, there has been no formal preliminary discussion presented by the government, specifically the Ministry of Finance,” he stated on Friday, 13 March 2026.

He noted that without prior communication from the government, he cannot yet offer a comprehensive opinion. However, he emphasised that every policy adopted must have a foundation, objective, and strategy.

Abdullah observed that the government still has fiscal space to operate below the 3 per cent GDP threshold. There are numerous ways to achieve such fiscal discipline.

First, maintaining state revenue targets and improving the tax system through core tax system reforms are expected to enhance tax collection, whilst rising commodity export prices, such as petroleum and potentially coal, would increase state owned enterprises’ revenues.

Second, from the expenditure side, the government must pursue efficiency measures. The focus should be on reducing spending on non-priority programmes, drawing on previous experience in this area.

“If spending can be controlled and balanced with revenue realisation, the deficit target below 3 per cent of GDP can, God willing, be maintained,” he said.

Third, the government must also ensure that financing targets are managed properly. Amid the impact of negative credit rating reviews, securing financing through state bonds has become more difficult.

“The Ministry of Finance and all departments must be able to convince foreign buyers to resume accepting state bonds and expand state bonds on a retail basis,” he said.