Luhut: Fiscal Position Remains Strong, Budget Deficit Can Be Increased If Required

JAKARTA – The National Economic Council has assessed that the escalation of conflict in the Middle East does not require excessive concern from the government.

Luhut Binsar Panjaitan, chairman of the National Economic Council, stated that Indonesia’s fiscal position remains sufficiently strong to withstand potential economic impacts from the conflict.

The government has also prepared several policy scenarios should the global situation deteriorate.

“We come with various scenarios, and we will observe developments over the next one to two weeks. So I believe that during Ramadan, everything will be fine,” said Luhut whilst reporting to President Prabowo Subianto during a Full Cabinet Session at the State Palace on Friday, 13 March 2026.

According to him, domestic economic conditions remain sufficiently strong to withstand global uncertainty.

Several of Indonesia’s export commodities are even considered to have the potential to benefit from global energy price dynamics.

These commodities include crude palm oil.

“Our recommendation is that there is nothing that needs excessive concern. We remain vigilant and continue to monitor developments abroad,” said Luhut.

He explained that the government has prepared several policy options to anticipate the economic impact of the conflict.

However, the decision to increase the deficit will not be taken in the near future.

“I believe the fiscal position is also sufficiently prudent for us to consider increasing the budget deficit as well, and I believe we need to consider this carefully, of course we are prepared. But when it will be implemented, I believe we will observe the situation’s development,” he said.