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View all search results‘High pressure’ on budget but 3% cap will be met, Purbaya vows
Finance Minister Purbaya Yudhi Sadewa has acknowledged high pressure on the state budget and said the government’s 2025 deficit target may be missed but vowed that the figure would remain below the legal cap at 3 percent of GDP.
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Finance Minister Purbaya Yudhi Sadewa's face is displayed on the screen during a speech at the Indonesia Stock Exchange (IDX) building in Jakarta on Dec. 3, 2025. (JP/Deni Ghifari)
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inance Minister Purbaya Yudhi Sadewa has acknowledged high pressure on the state budget and said the government’s 2025 deficit target may be missed but vowed that the figure would remain below the legal cap at 3 percent of gross domestic product.
Purbaya told reporters on Monday that the ministry was constantly monitoring the budget balance but could not unveil the final readings yet and could not guarantee that the revenue shortfall would not exceed the 2.78 percent of GDP stipulated in the budget blueprint.
“We’ll control it to be below 3 percent, so we’re not going to violate the law. [...] The strategy is to control governance, that’s what we have pursued,” said the minister, later adding: "Maybe it will be a bit bigger [than 2.78 percent of GDP], but I'll say below 3 percent, so legally still safe.”
In 2003, after a financial and monetary crisis swept across the country in 1997 and 1998, Indonesia passed a law capping the fiscal deficit at 3 percent of GDP.
The budget deficit stood at Rp 479.7 trillion (US$28.7 billion) at the end of October, according to the ministry’s latest data unveiled last month, which represented 2.02 percent of the country’s GDP and hence far below the legal cap and the planned 2.78 percent deficit.
However, state spending typically picks up pace in the final quarter of the calendar year as the government normally tries to expend the budgeted allocations. The remaining two months in the fourth quarter leaves a significant window for burning through cash.
At the end of October, government institutions had exhausted almost three quarters of the allocations set for 2025, which were revised downward in the middle of the year from the original figures set out in the 2025 State Budget Law.
