Finance Minister Warns Ministries to Prepare for Further Budget Efficiency Measures and Cuts

Jakarta – Finance Minister Purbaya Yudhi Sadewa has assured the government that it will maintain the state budget deficit at 3 per cent of gross domestic product (GDP).

To this end, he confirmed that the government will pursue efficiency measures again to keep the deficit at that level amid fluctuating global oil prices.

“If fuel prices continue to rise, the first step would be efficiency,” Purbaya said after attending a Limited Coordination Meeting (Rakortas) at the Coordinating Ministry for Economic Affairs in Jakarta on Monday, 16 March 2026.

Accordingly, Purbaya confirmed that within the coming week, his office will ask all Ministries and Agencies (K/L) to recalculate their budgets and prioritise core programmes over supplementary ones.

“We have already asked them to prepare calculations on what percentage of their budgets will be cut. There are several supplementary programmes and additional budget allocations that have made things quite bloated,” he said.

Given the current budgetary situation, Purbaya has asked each ministry and agency to focus on core programmes rather than supplementary ones in order to maximise available funding.

However, Purbaya left open the possibility that budget cuts for ministries and agencies may not actually be implemented. He described this exercise as a precautionary initial step, so that if it becomes truly necessary, it can be executed promptly and properly.

“Perhaps within the coming week the Ministry of Finance will set out initial steps for them to prepare their calculations, but execution is not certain,” Purbaya said.

Nevertheless, Purbaya stressed that the current state budget remains secure. He acknowledged, however, that the government will immediately recalculate budgets if oil price increases become very significant and sustained.

“We have not seen that so far, but it seems the budget can withstand current conditions. Unless prices rise very sharply,” he said.