Jakarta. Finance Minister Purbaya Yudhi Sadewa reaffirmed Indonesia’s fiscal discipline, assuring global investors that the state budget deficit will remain capped below the legal limit of 3% of GDP, a key benchmark closely watched by markets.

Speaking during a meeting with investors in New York on Monday, Purbaya addressed concerns over fiscal sustainability and funding strategy.

“As investors, the natural question is how we finance this. We remain disciplined. The deficit is kept below 3% and managed prudently,” he said in an official statement released Tuesday.

Data from the Finance Ministry showed that as of March 31, the budget deficit stood at Rp 240.1 trillion ($14.02 billion), equivalent to 0.93% of GDP. State revenue reached Rp 574.9 trillion, or 18.2% of the full-year target of Rp 3,153.6 trillion, while government spending hit Rp 815 trillion, accounting for 31.4% of the Rp 3,842.7 trillion allocation in the 2026 state budget.

Purbaya said the government is pursuing multiple strategies to maintain fiscal health, including boosting revenue collection, optimizing state asset utilization, and ensuring efficient spending. Financing policies are also being carried out in a measured and opportunistic manner, with a growing role for private sector participation.

“We are promoting financing synergy and innovation, not relying solely on the government, but also involving the private sector,” he said.

He added that stronger private sector involvement could help lift Indonesia’s economic growth, citing the period under former president Susilo Bambang Yudhoyono, when growth reached around 6%, supported by robust private sector activity.

“Going forward, we want to ensure that both engines of growth, the private sector and the government, can work effectively. In theory, this should generate growth of at least around 6%,” Purbaya said.

He emphasized that maintaining growth in line with state budget assumptions is critical to sustaining investor confidence. Achieving growth of around 5.5% in the first and second quarters of 2026 would further strengthen investor optimism toward Indonesia.

“So our focus is to ensure that our policies are sound and that implementation stays aligned with our design,” he concluded.

The remarks come as Moody’s Ratings in February affirmed Indonesia’s sovereign credit rating at Baa2 but revised the outlook to negative, warning that weakening policy predictability and governance risks could undermine investor confidence and raise borrowing costs if unaddressed.

The agency said Indonesia still benefits from resilient growth, prudent macroeconomic management, and structural strengths such as favorable demographics and abundant natural resources. However, it flagged concerns over policy coherence and institutional effectiveness.

Moody’s highlighted expanded social spending, including free meals and housing programs, as potential fiscal pressures given Indonesia’s relatively weak revenue base. It warned that higher spending without durable revenue reforms could widen deficits and weaken fiscal credibility. It also pointed to uncertainty around the sovereign wealth fund Danantara, which manages more than $900 billion in state-owned assets, citing governance and contingent liability risks. Additional concerns included debates over the 3% fiscal deficit ceiling, potential changes to Bank Indonesia’s mandate, and resource-sector policy shifts, which may increase market volatility and deter investment.

Despite the negative outlook, Moody’s said Indonesia’s credit profile remains supported by stable growth near 5%, low inflation, and manageable debt levels, provided fiscal discipline is maintained.