Inp.polri.go.id - Jakarta.  Coordinating Minister for Economic Affairs Airlangga Hartarto has presented a "worst-case scenario" for the state budget, warning that the fiscal deficit could soar to 4.06% of GDP if Middle Eastern conflicts persist for ten months.

"In this pessimistic scenario, with global crude oil prices reaching $115 per barrel and the rupiah weakening to Rp17,500 per dollar, maintaining a 3% deficit becomes unsustainable without severe cuts to spending and national growth," he reported during a Plenary Cabinet Meeting at the State Palace on Friday (13/3/2026), as cited by antaranews.com

The Minister detailed three distinct scenarios based on the duration of regional hostilities between Iran, Israel, and the United States. Even the most moderate "Scenario 1" assumes a deficit of 3.18%, fueled by a projected Indonesian Crude Price (ICP) of $86 and a weakened currency. "Scenario 2" anticipates a 3.53% deficit if the conflict lasts six months, pushing oil to $97 per barrel. 

Minister Airlangga emphasized that these projections necessitate limited cabinet meetings to decide between maintaining growth through deficit expansion or implementing aggressive austerity measures to comply with current fiscal laws.

(mg/inp/pr/rs)