Purbaya Considers 10% Cut to Ministry Budgets, Bans New Proposals

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa is currently reviewing a proposal for a 10% cut to the budgets of ministries and agencies (K/L). The cut is aimed at efficiency to keep the state budget (APBN) deficit at 3% of gross domestic product (GDP) in the face of pressure from global crude oil prices, resulting from conflicts in the Middle East. He stated that no final figure has been determined regarding the size of the cut. “If we propose it, they (K/L) submit 10% (efficiency). But if I offer them (10% efficiency), they don’t cut but keep adding. If they say cut, they might adjust later. But what percentage, we’re still discussing,” he said to reporters after Eid prayers at the Directorate General of Taxation mosque in Jakarta on Saturday (21/3/2026). In addition, Purbaya emphasised that he will impose restrictions on new budget submissions by K/L. “I will limit the new budgets so they are not submitted again,” he said. Despite the plans for cuts and restrictions on budget submissions by K/L, the Finance Minister assured that this policy will not affect the economy. “But it won’t go as far as affecting the economy, and we will also ensure liquidity is well maintained. I monitor that perhaps daily,” he added. This option, he said, had previously been discussed in the Limited Coordination Meeting (Rakortas) agenda with Coordinating Minister for the Economy Airlangga Hartarto, held on Monday (16/3/2026). “So it was discussed earlier; if fuel prices keep rising, the first step is efficiency. We have prepared the necessary steps for ministries or agencies (K/L) later,” Purbaya said, quoted on Saturday (21/3/2026). In that Rakortas, each ministry or agency was asked to begin preparing portions of the budget that can be cut. “We have told them to prepare, we asked them to prepare how much percentage of their budget will be cut,” he stressed.