State Budget Deficit Widens in Early 2026, Danantara Chief Says Spending Pattern Deliberately Shifted

Jakarta – The Ministry of Finance reported that the state budget deficit by the end of March 2026 reached Rp240.1 trillion, or 0.93 percent of gross domestic product. The figure is said to be the highest first-quarter deficit in history, as the budget typically remains in surplus at the start of the year.

Responding to this, Dony Oskaria, Head of the State-Owned Enterprises Supervisory Board and Chief Operating Officer of Danantara, stressed that the first-quarter 2026 deficit that has drawn public attention is not a sign the government is losing control. The widening deficit is the result of a planned strategy, namely shifting the government’s spending habit from the end of the year to the beginning.

“Our deficit did widen in the first quarter. It was deliberate and by design,” Dony said. “This also needs to be straightened out, including for observers, economists, and all Indonesian people,” he stated on Saturday, 13 June 2026.

Dony explained that for years, government spending had piled up at the end of the year. “Previously, spending was concentrated in November and December. But if it is done at the end, the economic impact is felt only briefly,” he said.

The administration of President Prabowo Subianto, he said, deliberately reversed that pattern. Spending is optimised from the start of the year so that its multiplier effect can be felt throughout the year. The consequence is that expenditure goes out first while revenue has yet to fully come in, making the first-quarter deficit automatically appear wide.

To illustrate, he used a simple analogy. “Suppose we have a thousand to spend. Whether we spend it at the beginning, in the middle, or at the end, the total amount remains the same, a thousand. If spent at the end, the impact is felt only briefly. If optimised at the beginning, the impact lasts longer. But the total spending is the same,” he said.

He added that the revenue trend is already catching up. “In the second quarter, we are actually seeing a quite significant increase in tax revenue,” he noted.

Dony also addressed concerns that the government would keep ramping up spending until debt balloons and Indonesia becomes “more broke”. According to him, such worries ignore the most basic fact of Indonesia’s fiscal regime.

“Our spending has a limit. The state budget has a ceiling, and it is decided with the approval of the DPR. So the government cannot suddenly spend as it pleases. Moreover, our fiscal regime recognises a limit, it cannot exceed 3 percent. So it is impossible,” he asserted.