Prabowo Pushes Fiscal Austerity in Response to Middle East Conflict, Considers Work-From-Home for Civil Servants

JAKARTA — President Prabowo Subianto plans to implement austerity measures in response to the conflict in the Middle East following the United States and Israel’s attack on Iran.

Prabowo made this statement after explaining Pakistan’s budget-cutting steps taken in response to the escalation, during a full cabinet meeting at the State Palace, Presidential Palace Complex, central Jakarta, Friday (13 March 2026).

Pakistan has deemed the conflict between the US and Iran as a critical situation, referring to it as “critical measures.”

The Head of State requested that the Indonesian government study the matter.

The former Defence Minister stated that austerity remains necessary even though the current situation has not yet reached its worst level. This approach would prevent the state budget deficit from expanding further due to rising global oil prices following the conflict.

“I believe over the next two or three years we will be very strong, but we still need to conserve spending. In this way, we hope to ensure that our deficit does not increase. In fact, our aspiration is that we ideally have no deficit at all,” Prabowo said.

He asked his ministers to study the matter further.

“This is something I want discussed among the coordinating ministers in the coming days. Let us think about it. We faced Covid-19 before and we succeeded. We were able to manage it,” Prabowo said.

“For example, some civil servants and officials do not need to go to the office, which reduces congestion and achieves significant savings. We must also consider reducing working days and other austerity measures,” he added.

Prabowo stated that his government aims to make state revenue and expenditure in the state budget far more balanced.

One approach involves digitising government spending (GovTech), which is estimated to reduce budget leakage by up to 40 per cent.

“Our goal is that our state budget must be balanced; that is most ideal. I believe we can achieve that. We must always remember that we still face problems of budget leakage, inefficiency, under-invoicing issues, under-counting, administrative manipulation and the like. These are substantial issues. I apologise, but I will always speak about these problems,” Prabowo said.