Government has not planned to issue regulation on widening APBN deficit threshold

Jakarta — Finance Minister Purbaya Yudhi Sadewa stated that the government has not yet planned to issue a Government Regulation in Lieu of Law (Perppu) to regulate the widening of the fiscal deficit threshold for the 2026 State Budget (APBN).

Purbaya, speaking to journalists following a Limited Coordination Meeting at the office of the Ministry of Coordinating Economic Affairs in Jakarta on Monday, explained that fiscal budgets remain in a safe position.

The decision to change budget design architecture will continue to monitor developments in global oil prices in the coming period.

“A Perppu is not currently visible because the budget is still safe. If oil prices remain high for an extended period, we will recalculate what the budget situation looks like. But there would not be a direct Perppu,” said Purbaya.

“For me, indicators of crisis mean the economy is already in recession. The global economy is also in recession across the board. There is no other way to improve the economy, or all methods to improve the economy cannot reverse the direction towards economic growth,” he explained.

Purbaya stated the government would continue to measure the impact of rising oil prices on the budget burden, including the domino effect on other energy commodities such as coal and nickel.

However, he said, so far no adjustment to the APBN deficit threshold has been necessary.

Previously, Minister of Coordinating Economic Affairs Airlangga Hartarto had presented the worst-case scenario of the impact of conflict in the West Asian region on state finances, particularly the APBN deficit that could reach 4.06 percent.

The APBN deficit threshold is currently set at 3 percent of GDP as stipulated in Law Number 17 of 2003 on State Finance.

Indonesia’s government previously suspended the 3 percent deficit limit during the COVID-19 pandemic, which was regulated through Government Regulation in Lieu of Law (Perppu) Number 1 of 2020.