3% Deficit Is Non Negotiable, Deputy Finance Minister Says After Moody’s Outlook Cut

JAKARTA, Investortrust.id — Deputy Finance Minister Juda Agung says the government will keep the fiscal deficit below 3% of gross domestic product on Tuesday, Feb 10, 2026 in Jakarta despite Moody’s revising Indonesia’s outlook to negative, calling the limit non negotiable to safeguard fiscal credibility. The stance comes as the rating agency flagged policy predictability and fiscal management as key concerns while maintaining Indonesia’s Baa2 rating.

“We will maintain 3% of GDP, that is non negotiable,” Juda said when asked about the fiscal stance following Moody’s latest assessment. He stressed that fiscal discipline remained the government’s anchor amid global uncertainty.

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Moody’s earlier downgraded Indonesia’s outlook from stable to negative while keeping the sovereign rating at Baa2, one notch above the investment grade threshold. The agency highlighted the need for predictable policy communication, stronger interagency coordination, and sustainable revenue mobilization.

Juda said the evaluation would serve as a lesson for improving governance and risk management. “This is something we need to coordinate, of course. Other ratings will come on Feb 23, 2026, so we are preparing everything. This is what I call the lesson learned from Moody’s,” he said.

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He reiterated that the debt to GDP ratio would also be kept around 40%, well below the statutory ceiling of 60% set under the State Finance Law. “The law allows 60%, but we will maintain it around 40%,” Juda said.

As of the end of 2025, government debt stood at Rp 9,549.46 trillion, equivalent to 40.08% of GDP. Juda said the level remained manageable and did not threaten fiscal sustainability. “[It's] safe, [it's] safe,” he added.

The 2025 state budget deficit widened to 2.92% of GDP, or Rp 695.1 trillion, higher than the initial target of 2.53% but still below the 3% ceiling. The current year’s budget law sets the deficit target at 2.68% of GDP.

Juda said the government would continue strengthening governance, policy execution, and risk mitigation frameworks. “We must improve all of this, whether it is related to governance, policy governance, or other risks,” he said.