ASEANEWS- BIZ REGULATIONS | Govt mulls lifting deficit cap amid high oil price
Smoke rises in the Fujairah oil industry zone on March 14, caused by debris after interception of a drone by air defenses, according to the Fujairah media office, amid the US-Israel war on Iran, in Fujairah, the United Arab Emirates. (Reuters/Staff)
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The government says this year’s fiscal deficit may temporarily exceed the legal limit for the sake of maintaining economic growth should oil prices remain elevated for a prolonged period as the US-Israeli war on Iran rages on.
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T he government has indicated that this year’s fiscal deficit may temporarily exceed the general legal limit for the sake of maintaining economic growth if oil prices remain high as war rages on in the Middle East.
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President Prabowo Subianto said in a cabinet meeting on Friday that a “balanced budget is the most ideal”, stressing that he hoped the deficit would not exceed the cap set at 3 percent of gross domestic product.
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The cap was put in place in 2003 to enforce disciplined fiscal policy following the experience of the Asian Financial Crisis of 1997–1998.
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However, Prabowo said in an interview with Bloomberg the following day that the administration might allow for a short-term increase of the deficit cap should oil prices stay elevated for a prolonged period.
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He said the cap was “a good tool to discipline ourselves” and that there was no plan to revise the 2003 law, “unless there’s a very big emergency like COVID”, before adding, “but I hope that we need not change it”. “We must live within our means”, the President said in the interview. “Do not spend more than you earn.”
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Deni Ghifari
The Jakarta Post- PREMIUM
Jakarta
Sun, March 15, 2026
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