Finance Minister States That Deficit Above 3% Currently Unnecessary

Jakarta — The government considers that expanding the budget deficit beyond the maximum 3% threshold of gross domestic product (GDP) set by the State Finance Law is not currently necessary, particularly without issuing a Regulation in Lieu of Law (Perppu).

This statement was made by Finance Minister Purbaya Yudhi Sadewa following a limited coordination meeting chaired by Coordinating Minister for Economic Affairs Airlangga Hartarto in Jakarta on Monday 16 March 2026.

“It’s not apparent at the moment because the budget remains stable,” Purbaya stated.

Purbaya emphasised that although global crude oil prices temporarily rose above US$100 per barrel, exceeding the 2026 budget assumption of US$70 per barrel due to the conflict between Iran, the United States and Israel in the Middle East, the government’s fiscal condition remains secure.

He noted that the spike in global crude oil prices has been offset by increases in prices of Indonesia’s key export commodities, such as nickel and coal. As a result, the potential increase in energy expenditure from higher oil prices can still be covered by revenue from commodity exports whose prices have risen.

“Coal prices have risen, nickel prices have risen too. We need to see what the net impact on budget expenditure is. That’s not evident yet, it’s still unstable. So we haven’t seen it at this point, but it seems the budget is sufficiently resilient,” Purbaya explained.

Nevertheless, Purbaya acknowledged that the government could reconsider plans to raise the deficit limit if global crude oil prices continue to increase over a prolonged period.

“If oil prices remain elevated and persist for a long time, then we’ll calculate what the budget situation looks like, but not automatically through a Perppu,” Purbaya stated firmly.