Purbaya Asserts Budget Deficit Expansion Not Necessary, National Budget Still Secure

Finance Minister Purbaya Yudhi Sadewa has reaffirmed that the government currently has no plans to expand the national budget deficit beyond 3 per cent. The Finance Minister stated that the state budget remains secure in facing global geopolitical turbulence.

Purbaya also noted that there is currently no urgency to issue a Government Regulation in Lieu of Law (Perppu) to expand the budget deficit.

This was conveyed by Purbaya after attending a Limited Coordination Meeting (Rakortas) at the Office of the Coordinating Ministry for Economic Affairs in Jakarta on Monday, 16 March.

“It is not evident so far, because the budget is still secure. If oil prices remain high and persist for a long time, only then will we recalculate what the budget situation will be like. But we will not immediately resort to a Perppu,” he stated.

Purbaya also said that President Prabowo Subianto permits deficit expansion only under crisis conditions.

“The crisis indicator, for me, is when the economy is already in recession. And globally, everyone is also in recession. There is no other way to improve the economy. Or all methods to improve the economy cannot reverse the direction towards economic growth, unless there is additional stimulus to the economy,” he explained.

Meanwhile, the Finance Minister observed that Indonesia’s economy currently remains relatively sound. Nevertheless, he said, the government must still prepare anticipatory measures.

“We are not in crisis, our economy is still good, people are still spending. We just need to prepare thoroughly considered steps so that when needed, we can execute them properly,” he added.

Purbaya did not rule out potential spending cuts if necessary. “If fuel prices continue to rise, the first step is efficiency. We have already prepared the steps required by ministries and institutions. We have already asked them to prepare how many per cent of their budgets could be cut,” he said.

“Perhaps within the next week, the Finance Ministry will determine initial steps for them to prepare their calculations. But it is not necessarily execution—if cuts are to be made, which programmes to cut, roughly like that. They will then adjust their policies based on the Finance Ministry’s cuts,” he concluded.

The average price of Indonesian crude oil has remained below the assumptions set in the 2026 budget. The national budget balance as of 28 February 2026 showed strong and maintained fiscal performance. Although rising global oil prices could potentially place significant pressure on the 2026 budget, President Prabowo stated that Indonesia is currently in a relatively secure position. On the expenditure side, the government could also implement efficiency measures by focusing on various non-priority programmes.