Budget Deficit to be Maintained Below 3% of GDP: Parliamentary Budget Committee

The Chairman of the Parliamentary Budget Committee (Banggar) of the House of Representatives, Said Abdullah, has affirmed that the state’s budget deficit will remain below the 3% limit of Gross Domestic Product (GDP) as mandated by the State Finance Law.

Said stated that this commitment is important for maintaining fiscal stability whilst signalling confidence to markets and investors. He explained that the House of Representatives, through Banggar, is committed to adhering to the fiscal policy framework established by law, including the budget deficit ceiling.

“As Chairman of Banggar, we comply with the state budget law and the State Finance Law. Our deficit limit is 3% of GDP, and I have never contemplated exceeding that threshold,” Said said in a statement on Friday, 13 March.

He noted that Indonesia’s fiscal position currently remains within a relatively safe corridor. Banggar estimates the budget deficit can be maintained at around 2.8% of GDP. Consequently, he said, there is no scenario pointing to exceeding the established deficit limit.

“I believe our deficit can still be maintained at around 2.8%. We need not be excessively concerned as long as fiscal management is conducted with discipline,” he explained.

Said added that various global dynamics, including geopolitical tensions and fluctuations in world oil prices, do pose potential pressures on the economy. However, he assessed that the government has sufficient policy space to mitigate these various risks.

According to him, the government should strengthen fiscal management through sharpening priority programmes and implementing more effective state spending management. This approach is believed capable of preserving fiscal health whilst strengthening national economic resilience.

He also emphasised that compliance with the deficit limit is not merely a technical budgetary matter, but also concerns the credibility of Indonesia’s fiscal policy internationally. “This also signals to markets and investors that our fiscal foundation is healthy, stable, and sustainable,” stated the PDI Perjuangan faction legislator.

“Banggar will continue to oversee government fiscal policy to ensure it remains within a prudent framework and is capable of maintaining national economic stability amid various global challenges,” he concluded.