Indonesia Says Scenarios Show 3% Budget Deficit Cap Hard to Keep

Indonesia is facing an uphill battle to keep its budget deficit within the legal limit of 3% of gross domestic product as Middle East tensions push oil prices far beyond initial assumptions.

The government has modeled three scenarios involving fluctuating oil prices and rupiah exchange rates, all of which show the deficit cap would be hard to preserve without spending cuts that risk slowing growth, Coordinating Economic Minister Airlangga Hartarto said during a cabinet meeting in Jakarta on Friday.