Deficit Maintained Below 3 Percent

Center of Reform on Economics (CoRE) Indonesia economist Dipo Satria Ramli has offered his views on the posture of the Draft State Revenue and Expenditure Budget (RAPBN) presented by President Prabowo Subianto on Friday (14/8).

For context, President Prabowo Subianto is targeting state revenue of Rp3,426 trillion next year. This figure is up around 8.6 percent from the 2026 State Budget (APBN), which was set at Rp3,153.6 trillion.

Meanwhile, state spending is targeted at Rp4,097.2 trillion, up from the 2026 APBN figure of Rp3,842.7 trillion. The deficit is then targeted at 2.4 percent of Gross Domestic Product (GDP), down from the 2026 APBN deficit of 2.68 percent of GDP.

“Regarding the deficit, I very much appreciate that the government remains committed to keeping the figure below 3 percent. Regardless of all the pros and cons, I think this is a very good thing. Because we had heard rumours that the plan was to raise the deficit to 3.5 percent. With the President confirming once again that it is below 3 percent, I think this is actually a very good thing,” said Dipo.

He further described the state spending target of Rp4,097.2 trillion in 2027 as an aggressive move by the government. “Again, we are choosing between growth or caution, and this is clearly growth because Rp4,000 trillion is a fantastic, very aggressive figure. In many countries, especially OECD countries at the moment, they are being very cautious with fiscal spending,” he said.

He also highlighted that government fiscal spending aimed at improving public welfare through indirect programmes such as the Red and White Village/Sub-district Cooperatives (KDKMP), the Free Nutritious Meals programme (MBG) and others is considered less effective. He added that the 6 percent economic growth target set by the government for 2027 also needs to be examined further.

On the other hand, state spending also recorded strong growth of 18.2 percent. Government spending is directed at maintaining people’s purchasing power.

The government, together with the Indonesian Toll Road Authority (ATI), has agreed to strengthen toll road investment through private financing in order to reduce dependence on the state budget and ensure legal certainty.

Finance Minister Purbaya Yudhi Sadewa stated that the control of Pertalite fuel subsidies will be carried out gradually, targeting households in deciles 9 and 10.