Jakarta. Indonesia will maintain its state budget deficit below 3% of gross domestic product (GDP), Deputy Finance Minister Juda Agung said on Thursday, pushing back against parliamentary calls to loosen the fiscal limit to support faster economic growth.

“We remain committed to keeping the deficit below 3%,” Juda told reporters at the House of Representatives (DPR) complex in Jakarta on Thursday.

The government will continue to comply with Law No. 17/2003 on State Finance, which caps the budget deficit at 3% of GDP under Article 12, Paragraph 3.

Juda said maintaining the limit was essential to preserving Indonesia’s fiscal credibility and investor confidence.

“This is to maintain fiscal credibility,” he said.

His remarks came as lawmakers renewed calls to reconsider the deficit ceiling, arguing that greater fiscal flexibility could help Indonesia accelerate economic growth and escape the middle-income trap.

Misbakhun, chairman of the House Commission XI overseeing financial affairs, said the 3% limit should not be treated as an inflexible restriction on government spending.

“We have an opportunity to escape the middle-income trap and move our people from middle-income to high-income status. That requires growth expansion. How can we achieve that if we lock ourselves into this limit?” Misbakhun said during a public hearing at the House on Thursday.

He argued that Indonesia needed to explore new approaches to state financial management to optimize government spending and support economic expansion.

Misbakhun also pointed to other countries that allow budget deficits above 3% of GDP to finance economic growth, saying Indonesia should reconsider whether its existing restriction provides sufficient fiscal space.

The 3% deficit ceiling was introduced under the 2003 State Finance Law following the 1997-1998 Asian financial crisis. The restriction was designed to strengthen fiscal discipline, prevent excessive government borrowing and safeguard long-term budget sustainability.

However, calls to revisit the limit have gained traction as Indonesia seeks faster economic growth and aims to achieve high-income country status.

The debate highlights competing priorities in fiscal policy, with the government emphasizing budget discipline and credibility while lawmakers seek greater flexibility to finance infrastructure, education and other national priorities.

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