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View all search resultsBudget scrapes through 2025 with deficit just below legal cap
Last year’s fiscal deficit, or the amount by which state spending exceeded state revenue, was larger than planned at 2.92 percent of GDP, the finance minister revealed on Thursday.
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Finance Minister Purbaya Yudhi Sadewa's face is displayed on screen during his speech in the main hall of the Indonesia Stock Exchange (IDX) building in Jakarta on Dec. 3, 2025. (JP/Deni Ghifari)
T
he state budget scraped through 2025 with a deficit sitting just below the legal limit as the government spent hundreds of trillions of rupiah more than it collected in revenue.
Finance Minister Purbaya Yudhi Sadewa revealed in a press conference on Thursday that the full-year fiscal deficit was 2.92 percent of gross domestic product, narrowly avoiding a breach of the 3 percent cap set in a 2003 law enacted in the wake of Indonesia’s 1998 financial crisis.
“When the economy experiences a downturn, we have to give a stimulus to the economy. This is a manifestation of the government’s commitment to maintaining sustainable economic growth without harming the state budget,” said Purbaya.
The deficit figure is far higher than the 2.53 percent of GDP target set in the 2025 State Budget Law and exceeded the 2.78 percent of GDP forecast the government made in the middle of last year.
Purbaya could bring down the deficit to zero by cutting spending, “but the economy would be in a shambles”, he said, arguing that the higher spending was needed “so that the economy could still expand amid high global pressures” last year.
The minister emphasized that the budget adhered to the “strictest deficit” cap “even though the conditions put us under pressure”. He commended the budget for “ensuring the economy kept growing without sacrificing fiscal prudence”.
State revenue last year amounted to just Rp 2.76 quadrillion (US$164 billion), or 91.7 percent of the projection made mid-year, which already marked a downward revision of more than Rp 100 trillion from the target set in the state budget plan.
