Prabowo maintains 3% budget deficit limit, except in crises like COVID-19

President Prabowo Subianto has ensured that the government will maintain the 3 per cent budget deficit ceiling as a proportion of gross domestic product (GDP), except in the event of major emergencies and crises such as the COVID-19 pandemic.

The Government Communications Agency (Bakom) confirmed in an official statement released in Jakarta on Monday that President Prabowo made this commitment during an exclusive interview with Bloomberg, aired in March 2026.

President Prabowo explained that the budget deficit limit is an important instrument for maintaining fiscal discipline in state finances. The 3 per cent deficit limit was established under Law Number 17 of 2003 on State Finances.

“The deficit limit is a good tool for disciplining ourselves. We have no plans to change it except in the event of a very large emergency such as COVID-19,” President Prabowo said when responding to questions regarding the 3 per cent deficit during the exclusive interview session.

“I hope we will not need to change it,” he added.

In the same interview session, President Prabowo also assessed that Indonesia is in a more fortunate position compared with other countries, particularly amid threats of an oil crisis due to conflict between Iran, Israel and the United States.

Amid the threat of an oil crisis caused by disruptions to global crude oil supply and distribution due to the conflict, President Prabowo emphasised that Indonesia possesses several alternative resources, such as palm oil and coal, which remain relatively inexpensive and can guarantee national energy security.

At the same time, the President continued that the government is also developing geothermal energy, solar power, hydropower, and biofuel as alternative energy sources.

“If we can get through this, in two years we will be very efficient. […] We will be very, very independent from external sources,” said President Prabowo.

The issue of the 3 per cent deficit has become a point of focus, particularly following the rise in global crude oil prices due to the Iran versus US and Israel conflict. During a full Cabinet session last week, the Coordinating Minister for Economic Affairs Airlangga Hartarto reported to President Prabowo that it would be difficult to maintain the 3 per cent deficit limit if the conflict persists for six to ten months.