Prabowo Only Agrees to Budget Deficit Expansion in Crisis: Finance Minister Purbaya

Finance Minister Purbaya Yudhi Sadewa stated that no decision has yet been made regarding raising the budget deficit ceiling above 3 per cent of the state budget (APBN) as a percentage of GDP. The government has prepared various scenarios, but the final decision rests with President Prabowo Subianto.

Purbaya said he was unaware of plans to issue a government regulation in place of law (Perppu). “That depends on the president’s decision,” he said following a meeting at the Coordinating Ministry for Economic Affairs office in Jakarta on Monday, 16 February 2026.

The state treasurer stated that the government currently intends to focus first on budget optimisation, including revenue collection, budget management, and state treasury operations to support economic growth.

Purbaya also clarified whether the president had approved expanding the deficit. “In normal circumstances, no. Under crisis conditions, yes,” he said.

According to him, crisis indicators include recession, including in the global economy, and when no other methods exist to improve the economy.

Additionally, Purbaya emphasised that the budget for priority programmes, including the Free Nutritious Meals programme (MBG), would not be cut for savings. However, the government is open to efficiency measures in ministry and institutional budgets.

Under the budget deficit law, the APBN deficit is capped at no more than 3 per cent of Gross Domestic Product (GDP). However, discussion of expanding the deficit emerged after Coordinating Minister for the Economy Airlangga Hartarto presented three worst-case deficit scenarios resulting from conflict in the Middle East.

In a cabinet meeting before President Prabowo Subianto at the State Palace in Jakarta, Airlangga calculated that under conflict conditions, the APBN could see a deficit ranging from 3.18 per cent to 4.06 per cent of GDP.

“This means that with these various scenarios, maintaining a 3 per cent deficit would be difficult unless we are willing to cut spending and reduce economic growth,” said Airlangga on Friday, 13 March 2026, cited from the Presidential Secretariat’s YouTube channel.