Commission XI of Parliament Responds to Option of State Budget Deficit Above 3 Per Cent

The head of Commission XI of the Indonesian parliament, Mukhamad Misbakhun, has responded to reports that the government is discussing raising the ceiling on the state budget deficit above 3 per cent of gross domestic product. When asked whether discussions have taken place between the government and parliament, Misbakhun stated he had not heard of any such plans.

“I have not heard anything about it,” Misbakhun said via text message on Friday, 13 March 2026. He stated that the government currently wishes to maintain fiscal discipline in accordance with existing regulations, as has been conveyed to Commission XI. The 3 per cent deficit ceiling is stipulated in Law Number 17 of 2003 on State Finance.

Said Abdullah, head of parliament’s Budget Body, also stated there has been no communication with the government regarding changing the state budget deficit ceiling. Nevertheless, he argued that every policy adopted must have a basis, objective, and strategy.

“I see the government still has fiscal space to manoeuvre below 3 per cent of GDP,” Said stated in a written statement on Friday, 13 March 2026. According to him, a policy to expand the deficit ceiling above 3 per cent has both positive and negative impacts. The positive impact is that fiscal space would be wider in the short term. However, in the medium term, the fiscal burden would increase because expanding the deficit is financed through debt.

Finance Minister Purbaya Yudhi Sadewa claims he is unaware of any discussion within government circles regarding the option to raise the state budget deficit ceiling above 3 per cent of GDP. “I don’t know yet, it’s still being thought through,” Purbaya told journalists at the Finance Ministry on Friday, 13 March 2026.

Nevertheless, the finance minister stated that the ministry regularly calculates the impact of rising global oil prices on the state budget. As such, if a decision needs to be made, the ministry will calculate its impact on the economy. Purbaya also stated that the ministry will continue to pursue a prudent fiscal policy.

According to Finance Ministry records, the state budget deficit reached 135.7 trillion rupiah at the end of February, surging 324.4 per cent compared to the same period the previous year. This figure is equivalent to 0.53 per cent of GDP.