Indonesian Stocks, Bonds Drop on Deficit Cap Concern

Indonesia’s stocks and government bonds fell on concern Prabowo Subianto’s administration is moving closer to removing the long-held deficit ceiling for the state budget.

The Jakarta Composite Index of shares slid as much as 3.1% to an eight-month low after ministers said in a cabinet meeting on the weekend that the budget deficit limit of 3% of gross domestic product is difficult to maintain as the Iran war pushes up oil prices. Prabowo said he would only consider temporarily exceeding the deficit cap for emergency situations, speaking in an interview with Bloomberg on Saturday.