On Proposals to Expand Budget Deficit Above 3 Per Cent, Purbaya: Still Being Considered

Jakarta – Finance Minister Purbaya Yudhi Sadewa has responded to reports suggesting that the government may expand the 2026 state budget deficit (APBN) beyond 3 per cent, thereby exceeding the limit stipulated in Law No. 17 of 2003 on State Finance.

The minister acknowledged that he was still considering the matter and indicated that the proposal remains under government review.

“I do not yet know about this. It is still being considered,” Purbaya said at the Ministry of Finance in Jakarta on Friday, 13 March 2026.

He emphasised that the government would continue to monitor fluctuations in international oil prices and calculate their impact on the state budget. Should the government decide to expand the deficit beyond 3 per cent, Purbaya assured that it would also assess the broader implications of such a policy.

“We always calculate the impact of international oil price increases on our budget. So when a decision is needed, we calculate its effects,” he stated.

Purbaya acknowledged that expanding the state budget deficit beyond 3 per cent is not a straightforward decision, as it would likely have negative consequences for Indonesia’s international standing.

Particularly concerning is the possibility that international rating agencies could assign a negative rating to the national economy following a deficit expansion.

“The consideration is whether breaching the 3 per cent threshold would prompt rating agencies to penalise us or provide a negative assessment,” Purbaya said.

However, Purbaya also noted that many other countries currently operate with deficits exceeding 3 per cent.

“In fairness, most of the countries around us have deficits above 3 per cent. There are hardly any below that level. So based on those figures alone, there should be no problem,” he said.