Ervana Trikarinaputri, Jakarta – Indonesian President Prabowo Subianto stated that the option to temporarily relax the state budget deficit or APBN limit is possible if the world crude oil prices surge in the long run due to escalating conflicts in the West Asian region. However, the Head of State emphasized that expanding the deficit is a last resort.

Prabowo stated that his administration does not plan to change the deficit by more than 3 percent. He mentioned that the budget deficit limit of 3 percent of the gross domestic product (GDP) will only be altered in the event of a serious crisis.

"I hope we don't have to change it. Actually, I don't believe in deficits. Maybe I'm an old-fashioned person," said Prabowo in a special interview with international media Bloomberg, in Hambalang, West Java, quoted from the official statement of the Indonesian Government Communication Agency.

The possibility of widening the budget deficit surfaced after Coordinating Minister for Economic Affairs Airlangga Hartarto revealed scenarios of deficits due to the war between the United States-Israel and Iran.

In a plenary cabinet meeting on Friday, March 13, 2026, Airlangga presented three worst-case deficit scenarios for the state budget. According to his calculations, in a time of war, the state budget deficit could range from 3.18 percent to 4.06 percent of the GDP.

President Prabowo emphasized his administration's commitment to maintaining fiscal discipline, unless a major crisis occurs. Prabowo referred to the deficit limit as an essential tool to maintain discipline in state financial management.

"The deficit limit is a good instrument to discipline ourselves. We have no plans to change it unless there is a very significant emergency, such as Covid-19," said Prabowo.

In the same interview, Prabowo openly rejected economic theories advocating high growth achievements through large borrowing. He mentioned that since childhood, he was taught by his parents to believe that expenditures should be adjusted to one's means.

"Don't spend more than we earn," he said. "It's a basic principle of life to survive," he added.

It is known that Indonesia has set a maximum budget deficit limit of 3 percent of the GDP since the early 2000s, after the Asian financial crisis. This provision has been claimed as one of the pillars of fiscal discipline observed by investors.

Prabowo reiterated his commitment to maintain the deficit limit, although many other countries have abandoned strict deficit targets. He stated that Indonesia initially wanted to emulate the European Union rules that limit the maximum fiscal deficit to 3 percent of the GDP. However, many countries in that region no longer adhere to it.

The Chair of the Gerindra Party assessed Indonesia to be more fortunate than other countries. Indonesia has natural resources such as palm oil and coal, which are still relatively inexpensive and can guarantee national resilience.

Furthermore, the government will continue to develop geothermal, solar, hydropower, and biofuel as alternative energy sources. "If we can get through this, within two years we will become very efficient," said Prabowo. "We will be very, very independent of external sources."

Source: https://en.tempo.co/read/2093145/prabowo-opens-door-to-wider-deficit-if-oil-prices-surg