Finance Minister Purbaya Yudhi Sadewa Prepares Additional Rp90 Trillion in Regional Transfers for 2027

Finance Minister Purbaya Yudhi Sadewa has revealed the government’s strategic plan to strengthen regional financial capacity. The government is projecting an increase in the Regional Transfer Fund (TKD) budget of up to Rp90 trillion for the 2027 fiscal year. During a working meeting with the Regional Representative Council (DPD) in Jakarta on Monday (22/6/2026), Purbaya explained that the government has currently prepared an additional initial fiscal space of approximately Rp40 trillion. This figure could potentially increase depending on the future condition of the State Budget (APBN). “There is room for the regions. There will definitely be an increase. The most important thing is that regional fiscal strengthening is carried out carefully without disrupting the government’s commitment to maintaining a prudent deficit,” said Purbaya. In addition to relying on the APBN, the Finance Minister is encouraging local governments (Pemda) to utilise development financing instruments through PT Sarana Multi Infrastruktur (SMI). This scheme is considered an effective solution amidst regional budget constraints for building strategic infrastructure. Through PT SMI, regions can access low-interest, long-tenor loans for vital projects such as hospitals, schools, drinking water supply systems (SPAM), and regional road improvements. “Regions can still develop despite budget limitations,” he added. The government is also refining the Central and Regional Financial Relations (HKPD) framework. The main focus includes the digitalisation of TKD distribution and strengthening fiscal synergy between the central and regional governments through the preparation of a regional Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF). These steps are expected to ensure that regional development policies become more effective and accountable, and have a direct impact on improving community welfare and creating new economic growth centres throughout Indonesia.