Indonesia orders cost-cutting measures to keep fiscal deficit in check
In the circular letter, Suahasil Nazara ordered civil servants to prioritize online meetings and to halt any procurement of new vehicles, as well as the construction or renovation of official residences and buildings.
Indonesia's Finance Minister, Suahasil Nazara, has mandated cost-cutting measures aimed at maintaining the country's fiscal deficit within legal limits. These directives, outlined in a circular letter, include a 30 percent reduction in ministries and agencies' travel budgets and a freeze on non-essential spending for the remainder of 2026.
Civil servants have been instructed to favor online meetings, discontinue the procurement of new vehicles, and refrain from constructing or renovating official residences and buildings. These actions are intended to keep the deficit below the 3 percent GDP ceiling, a target set in 2003 following the Asian financial crisis.
The finance ministry has also requested that all government agencies submit their budget cut proposals to it by October 16. Proposals must not compromise public services and must remain aligned with the president's priority outputs.
The government's latest estimate for the 2026 deficit is 2.85 percent of GDP, which is above the initial target of 2.68 percent. The increasing energy costs, coupled with a spike in global energy prices, is further complicating Indonesia's fiscal situation.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
