Deficit Maintained Below 3 Percent

Center of Reform on Economics (CoRE) Indonesia’s Dipo Satria Ramli has shared his views on the posture of the Draft State Revenue and Expenditure Budget (RAPBN) delivered by President Prabowo Subianto on Friday (14/8). President Prabowo Subianto is targeting state revenue of Rp3,426 trillion next year, an increase of approximately 8.6 percent from the 2026 State Budget (APBN) figure of Rp3,153.6 trillion. Meanwhile, state expenditure is targeted at Rp4,097.2 trillion, up from the 2026 APBN figure of Rp3,842.7 trillion. The deficit is 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 really 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 about a plan to raise the deficit to 3.5 percent. With the President confirming once again it is below 3 percent, I think this is actually a very good thing,” said Dipo. He further described the state expenditure target of Rp4,097.2 trillion in 2027 as an aggressive move by the government. “It comes back to whether we choose growth or caution. This is clearly growth, because Rp4,000 trillion is a fantastic, very aggressive figure. In many countries, especially OECD countries, they are currently being very cautious with fiscal spending,” he stated. He also highlighted government fiscal spending aimed at improving public welfare through indirect programmes such as the Koperasi Desa/Kelurahan Merah Putih (KDKMP) and the Free Nutritious Meals (MBG) programme, which he deemed less effective. He added that the government’s 6 percent economic growth target for 2027 also needs further scrutiny.