Jakarta. Indonesia is preparing contingency measures to protect its state budget if global oil prices remain elevated for an extended period, Finance Minister Purbaya Yudhi Sadewa said on Monday.

The government could implement spending cuts across ministries and agencies and may consider raising the current budget deficit ceiling of 3% if energy prices stay high for a prolonged period, Purbaya said.

Any increase to the deficit cap would require the government and parliament to revise the existing state budget law.

For now, however, the impact of rising global oil prices on Indonesia’s fiscal position remains limited, and the state budget still has sufficient fiscal space, he said.

“As long as oil prices remain manageable, there is no immediate need to amend the budget law,” Purbaya said after attending an economic coordination meeting in Jakarta.

“If oil prices stay high for a long time, then we will recalculate what the budget situation will look like,” he added.

As an initial precaution, the government has asked ministries and state agencies to identify potential spending cuts should energy prices continue to climb.

“We have asked them to prepare estimates on what percentage of their budgets could be reduced,” Purbaya said.

However, he stressed that the proposed efficiency measures have not yet been finalized.

“Within the next week, the Finance Ministry will likely determine the initial steps so they can begin preparing their calculations. But it does not mean the measures will necessarily be implemented,” he said.