Purbaya Claims Indonesia's State Budget is the Most Sophisticated in Asia: Let's Check the Data!

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa assesses that Indonesia’s fiscal condition remains very strong, even compared to many other countries. Purbaya states that Indonesia’s fiscal management is among the best.

According to Purbaya, many parties often negatively assess the fiscal condition despite the state budget deficit still being controlled and the government’s fiscal space remaining intact.

“Fiscal is good but called bad, fiscal is good with a controlled deficit but said to weaken the exchange rate. Yet compared to all countries in Asia, in the world, we are the most sophisticated,” Purbaya said, quoted on Thursday (7/5/2026).

Purbaya emphasises that the government continues to maintain the health of the state budget, even as state spending is accelerated to boost economic growth. According to him, the government’s current fiscal strategy is able to support the economy without causing the deficit to widen excessively.

He also cited the first-quarter 2026 economic growth achievement of 5.61% year-on-year. According to Purbaya, this achievement signals that the government’s strategy is starting to bear fruit.

“If I say we’ve escaped the 5% growth curse, it’s 5.61%. We hope for faster growth ahead, and we will maintain the existing growth momentum,” Purbaya said.

Purbaya also emphasised that the state budget deficit will remain kept below 3% of Gross Domestic Product (GDP).

“The deficit will be kept below 3%. Last year it was only 2.8%, not 2.9. Only 2.8% of GDP,” he said.

Indonesia’s Fiscal is the Most “Sophisticated”: Is it True?

If viewed from the government’s budget deficit position, the claim that Indonesia’s fiscal is relatively healthy does have a basis.

The Indonesian government’s budget deficit was recorded at 2.92% of GDP in 2025. Citing data from Trading Economics, compared to several other major Asian countries such as China, India, the Philippines, Malaysia, South Korea, and Vietnam, the state budget deficit is indeed lower.

However, it should be noted that the data between countries are not all from the same period.

Indonesia, Pakistan, Saudi Arabia, and Singapore use 2025 data. Meanwhile, most other countries still use the latest available data, namely the 2024 period.

For comparison, China recorded a budget deficit of 6.5% of GDP in 2024, the Philippines 5.7% in 2024, India 4.8% in 2024, Malaysia 4.1% in 2024, South Korea 3.9% in 2024, and Vietnam 3.6% in 2024.

Indonesia’s deficit is only slightly larger than that of Nepal, Hong Kong, Laos, Japan, Cambodia, and Thailand.

This condition is important because a lower deficit provides space for the government to maintain fiscal credibility. At the same time, the state budget can still be used as an instrument to drive economic growth, maintain people’s purchasing power, and dampen pressures from global volatility.

However, it should be remembered that Indonesia’s fiscal discipline has clear limits. Based on Law No. 17 of 2003 on State Finances, the budget deficit is limited to a maximum of 3% of GDP.

Therefore, market concerns about Indonesia’s fiscal condition are not solely because the deficit is larger than other countries, but more on the risk if the deficit approaches or even breaches the limit set by law.

Furthermore, based on the March 2026 Our State Budget report or throughout the first quarter of 2026, the state budget deficit was recorded at Rp240.1 trillion or about 0.93% of Gross Domestic Product (GDP).

In nominal terms, this figure becomes the deepest state budget deficit per March at least since 2014, or in the last 12 years.

Indonesia’s Debt-to-GDP Ratio Still Safe

Besides from the deficit side, Indonesia’s fiscal condition can also be seen from the debt-to-GDP ratio.

Simply put, the debt-to-GDP ratio is the comparison between the total government debt and a country’s economic size. This ratio is used to see how large the government’s debt burden is compared to its economy’s ability to generate income.

Currently, Indonesia’s government debt ratio is still at a relatively controlled level. Based on Trading Economics data, Indonesia’s government debt ratio was recorded at 38.8% of GDP in 2024.

This figure is still far below the maximum limit set in the State Finances Law, namely 60% of GDP. This means that from a legal limit perspective, the government’s debt position in Indonesia is still within a safe corridor.

That position is also still lower compared to several other Asian countries. For example, Japan’s government debt ratio reaches 237% of GDP, Singapore 173%, China 88.3%, India 81.92%, Malaysia 70.4%, and the Philippines 63.2%.

With that, Indonesia has relatively more fiscal space compared to many other countries. Nevertheless, that space still needs to be maintained.