Budget Efficiency: Government's Strategy to Maintain 3% Deficit Amid Global Turmoil

Jakarta — The national budget deficit threatens to widen if the conflict between the United States and Israel against Iran persists. The prolonged conflict could maintain crude oil prices above $100 per barrel for an extended period, consequently increasing government subsidies for fuel and other essential commodities.

The government has therefore prepared a strategy to counter the threat of a widening budget deficit through efficiency measures. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that President Prabowo Subianto has issued a directive to maintain the national budget deficit at 3%.

Consequently, the government must exercise fiscal discipline through concrete measures, including budget efficiency across ministries and government agencies. “The President is maintaining the deficit at 3 per cent and there was a special coordination meeting following yesterday’s plenary session. The major ministries and agencies have been tasked with calculating how much can be made efficient,” Hartarto said during a media gathering at the Coordinating Ministry for Economic Affairs office in Jakarta on Monday, 16 March 2026.

Hartarto explained that the budget areas subject to efficiency could vary. These include service expenditures, official travel expenses, administrative costs, and equipment purchases. Once calculated, these figures will be reported to President Prabowo Subianto for final approval before implementation.

“That is all we are preparing at the moment. Once the data is finalised and reported to the President, we will make the announcement to the public,” he added.

Although budget efficiency will be applied across ministries and agencies, Hartarto emphasised that the government’s flagship programmes will not be subject to budget cuts. “Priority programmes in the budget will not be reduced,” he stressed.