In a POV Talks discussion in Jakarta, Deputy Finance Minister Juda Agung said Indonesia’s fiscal position remains safe and controlled despite global economic uncertainty and geopolitical tensions. He said the government is maintaining macroeconomic stability through fiscal discipline and still expects the state budget deficit to remain at 2.94%, below the legal ceiling of 3%, while keeping subsidised fuel prices unchanged. He identified higher global oil prices as the main external challenge, stating that each USD 1 per barrel increase would widen the fiscal deficit by IDR 6.8 trillion. To offset that pressure, the government is cutting non-urgent and lower-quality spending and prioritising productive expenditure with a larger multiplier effect, including the Free Nutritious Meals programme and downstreaming and industrialisation projects. He also pointed to an excess budget balance of IDR 420 trillion as a fiscal buffer for urgent needs, market stabilisation and countercyclical support, and said the banking sector is stronger than in 1998, with tighter supervision and limits on corporate external borrowing.
Ministry of Finance (Indonesia)2026-05-19
Indonesia Ministry of Finance says fiscal position remains under control with budget deficit projected at 2.94%
Indonesia’s Deputy Finance Minister Juda Agung said the fiscal position remains safe and controlled, with the 2026 state budget deficit expected at 2.94%, below the 3% legal ceiling, while subsidised fuel prices are unchanged. He highlighted higher global oil prices as the main external risk and said the government is cutting non-urgent spending, prioritising productive programmes, and relying on an excess budget balance of IDR 420 trillion as a fiscal buffer, noting that the banking sector is stronger than in 1998.