Indonesia will keep budget deficit below 3% of GDP as conflict lifts oil prices

Indonesia is ready to adjust budget expenditure to keep its fiscal deficit below 3% of GDP as the conflict in the Middle East threatens to drive up oil pricesand pile more pressure on the economy, Finance Minister Purbaya Yudhi Sadewa said on Tuesday.



Even before the current crisis, the rupiah and the Indonesian stock index have been among Asia's worst performers in 2026, with the currency weakening more than 1% against the U.S. dollar and the Indonesian stock exchange shedding as much as 7.5%, putting President Prabowo Subianto's ambitious economic goals in jeopardy.



The finance ministry has assessed that if the global oil price reaches up to around $90 per barrel, it could widen Indonesia's budget deficit to around 3.6% of GDP, Purbaya told Reuters in his first one-on-one interview with foreign media since he took office last year as a surprise replacement for the respected veteran Sri Mulyani Indrawati.