Deputy Finance Minister Optimistic about 2026 Economic Growth Ranging from 5.4 to 6 Percent, Here’s Why

Deputy Finance Minister (Wamenkeu) Juda Agung is optimistic that economic growth in 2026 will align with the 2026 State Budget (APBN) assumption of above 5 percent, and potentially even higher. According to him, this is supported by positive indicators.

“We see that in the first quarter, all the indicators show positive signs. Fiscal spending is positive, with growth from spending around 40%. Then, tax revenue year-to-date up to the end of March grew by 20.7%, in January 30%, February also 30% year-to-date,” said Juda during the Indonesia Outlook discussion event in Jakarta on Tuesday (7/4).

“Thus, the deficit is somewhat larger compared to last year, because last year’s spending and taxes were very low, now it’s 0.9%. So, looking at Q1, we are actually optimistic that our economy will grow even higher than the APBN assumption of 5.4%, most optimistic 6%. So between 5.4% to 6%,” he added.

Juda explained the assumptions to achieve that target. First, he said, maintaining people’s purchasing power. The government will not raise subsidized fuel (BBM) prices.

“Second, from the external side, there is actually a natural hedge; when oil prices rise, prices of our export commodities, coal, CPO, experience increases. So there is windfall revenue from here,” said Juda.

The government will continue to boost revenue from the collection side, with Coretax and so on. According to him, there are indications that state revenue will be much better compared to last year.

“From spending, because subsidy spending is rising, we manage it so that other spending is more efficient but still effective to drive priority programmes. There are rooms for efficiency,” revealed Juda.

These are the things, he continued, that the government manages so that overall the APBN deficit can still be kept below 3%, with economic growth, especially from people’s purchasing power, still maintained.

“Exports are positive from our commodity prices. For investment, we hope for the role of Danantara to encourage private investment, so if from the constellation of C, I, X and also more efficient G, our growth in 2026 we estimate will still be within the APBN assumption range, 5.4% to 6%,” he emphasised.

Juda also did not deny the APBN burden due to the escalation of world oil prices. For information, in the 2026 APBN assumption, the average world oil price is US$70 per barrel (around Rp1,195,000).

“Now the average oil price from January to April is US$78. So compared to the APBN assumption, it’s not far off,” he said.

“Well, if this persists and the average could reach US$100, our deficit can still be kept below 3%. Yesterday it was also conveyed by the Finance Minister in the DPR that it’s still above 2.9%. I think we can manage from revenue, from spending that we arrange to be more efficient and so on, so it’s still below 3%,” he concluded.