Parliamentary Budget Committee Responds to Reports of Planned Budget Deficit Increase
The chairman of the House of Representatives’ Budget Committee, Said Abdullah, stated that there has been no discussion with the government regarding options to increase the budget deficit limit of the State Revenue and Expenditure Budget (APBN) above 3 per cent of gross domestic product (GDP). The 3 per cent deficit limit is regulated under Law No. 17 of 2003 concerning State Finance.
Said stated that he could not offer further opinion on the issue as there has been no initial communication with the government. Nevertheless, he opined that every policy pursued must have a basis, objective, and strategy.
“I see the government still has fiscal space to move below 3 per cent of GDP,” Said stated in a written statement on Friday, 13 March 2026.
According to Said, the policy of widening the deficit limit beyond 3 per cent has both positive and negative impacts. The positive impact is that in the short term, fiscal space will be broader. However, in the medium term, the fiscal burden will increase because deficit expansion is financed through debt.
Said hopes the government will involve economists to conduct a study regarding the widening of the APBN deficit. “So that all the risks can be mapped, including their mitigation,” he said.
Finance Minister Purbaya Yudhi Sadewa previously responded to reports circulating that the government is discussing options to raise the APBN deficit limit above 3 per cent of GDP. He claimed to be unaware of any such plan.
“I do not yet know, it is still being considered, perhaps,” Purbaya told reporters at the Ministry of Finance on Friday, 13 March 2026. Nevertheless, he stated that the ministry always calculates the impact of rising global oil prices on the APBN.
Therefore, if a decision needs to be taken, the ministry will calculate its impact on the economy. Purbaya also stated that the ministry will continue to implement fiscal policy prudently.
Despite this, Purbaya acknowledged that he will implement any directive if Prabowo and Parliament give the green light regarding deficit expansion. “If it is an order, we will implement it. I am simply the president’s hands,” he said.
Based on records from the Ministry of Finance, the APBN deficit reached 135.7 trillion rupiah by the end of February, surging 324.4 per cent compared to the same period the previous year. This value is equivalent to 0.53 per cent of gross domestic product (GDP).