2027 Draft State Budget Deficit Set at 2.4 Per Cent, a Significant Increase

Jakarta (ANTARA) - Senior Economist at DBS Group Research, Radhika Rao, stated that the budget deficit in the 2027 Draft State Budget (RAPBN) for the 2027 Fiscal Year, set by the government at Rp671.2 trillion or 2.40 per cent of Gross Domestic Product (GDP), represents a significant improvement.

Regarding the established parameters for the 2027 RAPBN, Rao assessed that the framework created by the government has very clear objectives.

“The government’s target of nearly 2.4 per cent indicates two things. Firstly, there is a significant improvement compared to this year, showing a direction where fiscal consolidation will be considered important and thresholds will be managed,” Radhika said in Jakarta on Thursday.

Secondly, he continued, it automatically signals that they will monitor spending or expenditure. The Ministry of Finance has signalled a focus on efficiency measures and maximising reach through gradual fund allocation.

The target was formulated considering that national economic performance is expected to remain strong in 2026, amidst global dynamics and uncertainty.

The budget deficit for the 2027 Fiscal Year RAPBN is set at Rp671.2 trillion or 2.40 per cent of GDP. Financing policies will be conducted prudently through a combination of debt and non-debt financing, taking into account costs, risks, and long-term benefits.

With this structure, the 2027 Fiscal Year RAPBN remains designed to be expansive to provide a boost to the economy while maintaining fiscal sustainability. The government will continue to maintain economic resilience, encourage growth, and accelerate the improvement of public welfare in line with the theme “Grow Higher, Prosper Faster.”