JK Warns of Risks if Government Increases Budget Deficit Above 3 Per Cent

Jakarta — Former Vice President Jusuf Kalla (JK) has warned of the risks if the government seeks to expand the budget deficit of the State Budget (APBN) beyond 3 per cent.

Jusuf Kalla stated that increasing the APBN deficit would affect the burden of debt repayment and interest payments by the government.

“But the larger the deficit, the greater the risk that debt servicing and interest payments will increase. So the ratio of debt to the budget will become larger,” Jusuf Kalla said at his residence on Jalan Kebayoran Baru, South Jakarta, on Sunday (15 March 2026).

“And if debt grows larger, it could reach a maximum of 40 per cent, could reach 50 per cent, and that would be very dangerous for continuity,” he added.

“As the deficit grows larger, the capacity for development becomes smaller. This needs to be corrected,” he said.

Kalla stated that the proposal to expand the deficit beyond 3 per cent could only be implemented if the government revised the law governing the deficit limit.

“It is certainly possible if we change the law. So the first thing would be to change the law,” he said.

He reminded that local governments have responsibilities in various sectors such as education and health.

“Today the current budget allocation to regions is just 17 per cent. So regional infrastructure could be at risk, there will be a decline in its quality, and also in education. This is what the government must pay attention to, that regions are the building blocks of the nation,” he said.

In a Full Cabinet Session at the State Palace, the Coordinating Minister for Economic Affairs Airlangga Hartarto presented several scenarios if crude oil prices continue to rise and the rupiah weakens further.

Some of these scenarios predict the APBN deficit to be at 3.18 per cent to 4.06 per cent.