Addressing the House of Representatives (DPR RI) during its 7th\nPlenary Session in Jakarta, Suahasil stated that the fiscal design aims\nto cushion the impact of supply chain disruptions, commodity price\nvolatility and high global interest rates that threaten capital flows\ninto emerging markets.<\/p>\n
\u201cOn the other hand, in the financial sector, policy interest rate\nhikes by the Federal Reserve, as well as central banks in Europe and\nJapan, have the potential to affect global financial conditions and\ninvestor appetite for emerging markets like Indonesia,\u201d the minister\nsaid.<\/p>\n
\u201cHowever, we are grateful that amidst these difficult global\nchallenges, Indonesia\u2019s economic fundamentals continue to demonstrate\nstrong resilience,\u201d he added.<\/p>\n
Suahasil highlighted Indonesia\u2019s solid fiscal footing, pointing to a\ncumulative economic growth rate of 5.45 percent year-on-year in the\nfirst half of 2026, with second-quarter growth reaching 5.29\npercent.<\/p>\n
By August 2026, state revenue had reached Rp2,055.6 trillion\n(approximately US$114.84 billion), or 65.2 percent of the annual\ntarget.<\/p>\n
Throughout 2026, the government leveraged fiscal policy flexibly to\nmanage natural disasters, maintain energy and food supplies amid\nelevated oil prices and counter climate risks like El Ni\u00f1o, while\ncapping the fiscal deficit below 3 percent of GDP.<\/p>\n
\u201cFiscal policy must remain prudent but not passive. Fiscal policy\nmust play an active role in maintaining growth momentum and protecting\nthe public, all while upholding its credibility,\u201d Suahasil asserted.<\/p>\n
For 2027, the government and parliament agreed on an expansive fiscal\nstance with a target deficit of 2.4 percent of GDP.<\/p>\n
Both parties approved an Rp9.07 trillion (US$506.70 million) increase\nin state spending, raising total expenditure to Rp4,106.26 trillion\n(US$229.40 billion) from the initial proposed figure of Rp4,097.19\ntrillion (US$228.89 billion).<\/p>\n
The total expenditure includes central government spending of\nRp3,371.26 trillion (US$188.34 billion) and regional transfers of Rp735\ntrillion (US$41.06 billion).<\/p>\n
To match the spending expansion, agreed state revenue was revised\nupward by Rp9.07 trillion (US$506.70 million) to Rp3,435.10 trillion\n(US$191.91 billion), up from the initial target of Rp3,426.03 trillion\n(US$191.40 billion).<\/p>\n
The updated revenue plan is largely anchored by tax collections,\nwhich were adjusted upward to Rp2,911.95 trillion (US$162.68 billion)\nfrom the previous figure of Rp2,907.95 trillion (US$162.46 billion).<\/p>\n
Meanwhile, non-tax state revenue saw a corresponding increase to\nRp522.48 trillion (US$29.19 billion), rising from its prior projection\nof Rp517.41 trillion (US$28.91 billion).<\/p>\n
The macroeconomic assumptions approved for the 2027 budget include\nGDP growth of 6.0 percent, inflation at 2.5 percent and 10-year\ngovernment securities yields at 6.9 percent.<\/p>\n
The budget sets the exchange rate assumption at Rp17,500 per US\ndollar, the Indonesian Crude Price (ICP) at US$75 per barrel, crude oil\nlifting at 612,500 barrels per day and natural gas lifting at 954,000\nbarrels of oil equivalent per day.<\/p>\n
Related news: Indonesia to fund free public schools from existing\n2027 budget<\/p>\n
Related news: Indonesia\u2019s 2027 spending to exceed Rp4,000\ntrillion<\/p>\n
Translator: Bayu Saputra, Yashinta Difa<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesia-designs-prudent-2027-state-budget-amid-global-risks-1790707819", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }