Jakarta, IDN Times – Indonesian President Prabowo Subianto has firmly reiterated the government’s unwavering commitment to maintaining fiscal discipline, upholding a maximum budget deficit cap of 3 percent of the Gross Domestic Product (GDP). He emphasized that there are no intentions to alter this critical limit unless Indonesia faces an extraordinary, large-scale emergency, akin to the unprecedented challenges posed by the COVID-19 pandemic.
“That deficit limit is a good tool to discipline ourselves. We have no plans to change it unless there is a very big emergency like COVID-19,” Prabowo stated, as quoted on Monday (March 16, 2026).
This deficit limit serves as an essential instrument for maintaining national financial discipline. Prabowo underscored its importance in guiding sound financial management. “I hope we don’t have to change it,” he asserted, highlighting his preference for consistency in fiscal policy.
The maximum 3 percent state budget deficit cap has been a cornerstone of Indonesia’s fiscal policy since the early 2000s, implemented in the aftermath of the Asian financial crisis. This robust rule has consistently served as one of the primary pillars of fiscal discipline, earning significant attention and trust from global investors. Prabowo noted that Indonesia is relatively better positioned than many other nations, largely due to its substantial domestic energy resources such as palm oil and coal, which remain competitive and crucial for national resilience. Concurrently, the government is committed to aggressively developing alternative energy sources, including geothermal, solar, hydropower, and biofuels. This strategic diversification aims to bolster energy independence, as Prabowo added, “We will be very, very independent of external sources.”
President Prabowo further underscored the government’s dedication to strict fiscal discipline, even as numerous other countries have abandoned stringent budget deficit targets. He reflected on Indonesia’s past aspiration to emulate the European Union’s rule, which also caps fiscal deficits at a maximum of 3 percent of GDP, but observed that many nations within the bloc no longer adhere to it. Despite prevailing economic philosophies that advocate for growth through substantial debt, Prabowo firmly rejected such approaches. “Don’t spend more than we earn,” he declared, sharing that he was taught by his parents from a young age to live within his means. He concluded, “That is a basic principle of life to be able to survive.”
Summary
Indonesian President Prabowo Subianto has firmly reaffirmed the government’s commitment to maintaining a maximum budget deficit cap of 3 percent of the Gross Domestic Product. He emphasized that this limit will not be altered unless Indonesia faces an extraordinary, large-scale emergency, similar to the COVID-19 pandemic. This cap serves as an essential instrument for fiscal discipline and has been a cornerstone of Indonesia’s financial policy since the early 2000s, earning trust from global investors.
Prabowo noted Indonesia’s relatively strong position due to substantial domestic energy resources and the aggressive development of alternative energy sources. He firmly rejected economic philosophies advocating for growth through substantial debt, even as other countries have abandoned stringent budget targets. He underscored the fundamental principle of not spending more than earned, reinforcing the government’s dedication to strict fiscal discipline.