Jakarta. Finance Minister Purbaya Yudhi Sadewa said the government is still assessing whether Indonesia’s state budget deficit could widen beyond the legal 3% of gross domestic product (GDP), as rising global oil prices and geopolitical tensions in the Middle East pose risks to fiscal stability.

Speaking at the Finance Ministry office in Jakarta on Friday, Purbaya said the government is calculating how higher global oil prices could affect the state budget before making any policy decision.

“We are still studying it. We always calculate the impact of rising global oil prices on the state budget, so if a decision needs to be made later, we will first assess the implications,” Purbaya said.

The government is currently evaluating how escalating geopolitical tensions in the Middle East may influence oil prices and Indonesia’s fiscal outlook. Purbaya added that if President Prabowo Subianto approves a wider deficit, the Finance Ministry will implement the decision.

“I simply carry out the President’s mandate. If there is an order, we will execute it,” he said.

Indonesia’s fiscal management continues to follow Law No. 17/2003 on State Finance, which caps the annual budget deficit at 3% of GDP.

Finance Ministry data show the state budget deficit reached Rp 135.7 trillion ($8 billion) in February 2026, equivalent to 0.53% of GDP. The figure marked a sharp increase from Rp 30.7 trillion, or 0.13% of GDP, recorded in February 2025.

Any move to widen the deficit beyond the legal threshold could draw closer scrutiny from global credit rating agencies.

However, Purbaya noted that several major economies currently run fiscal deficits above the 3% benchmark, including Vietnam with a 4.2% deficit target for 2026, India at 4.3%, and the United States at 5.8% of GDP.

“Looking at those figures alone, it should not necessarily be a problem. But rating agencies also consider other factors, which we are currently reviewing. What is clear is that we will continue to manage fiscal policy prudently,” Purbaya said.

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