Finance Ministry Official Confirms State Budget Remains Safe Despite Rupiah Weakness

The Ministry of Finance has revealed that the State Budget (APBN) remains quite safe despite the rupiah’s continued weakening against the US dollar. Herman Saheruddin, Acting Director General of Financial Sector Stability and Development, stated that the 2026 APBN is still well maintained. “Regarding the rupiah exchange rate, so far, from the assessment of the Minister, which was also conveyed at the previous APBN Kita event, it appears that for the state budget, we can still manage it,” Herman said when met by journalists at his office on Thursday (25/6/2026). He acknowledged that the impact of rising global oil prices due to the war in the Middle East burdens the APBN because of the need to subsidise Pertalite fuel. However, Herman revealed that the APBN is still within safe limits. “So, if the rupiah exchange rate, as conveyed by the Finance Minister, the significant impact on the APBN is the oil price, because we have a lot of subsidies there, which is why the price of Pertalite has not increased even now. But the APBN is still well managed, one way being through efficiency, by reallocating the budget according to its priorities,” Herman continued. In addition, a mutually balancing effect on the rupiah exchange rate also helps reduce the burden on the APBN. “The rupiah depreciation has a mutually balancing or cancel-out effect. Net, it does impact the APBN. But from the calculations of the Directorate General of Fiscal Economic Strategy, it is still manageable so far,” Herman explained. Therefore, Finance Minister Purbaya is optimistic that by the end of 2026, the APBN deficit can be maintained at 3%. “The Minister conveyed that he is confident that until the end of the year, we can keep the deficit below 3%. We all hope that the conflict in the Middle East will end soon, so that a normalisation of global oil prices can occur,” he clarified. Previously, Minister Purbaya noted that the APBN deficit reached 0.70% of Gross Domestic Product (GDP), or Rp 180.4 trillion, as of May 2026. This was supported by the success of efforts to boost tax revenues, which grew by 22.1% year-on-year, alongside successful tax reforms and the reorganisation of tax employees. “This means that with the current deficit figure, our APBN is still very well maintained. The success is primarily that we can significantly increase tax revenue. So, compared to last year, in the first five months our tax revenue grew by 22.1%. That is very significant growth,” he stated during the CNBC Indonesia Economic Update on Wednesday (24/6/2026). In line with the achievement of 5.61% year-on-year economic growth in the first quarter of 2026, Purbaya noted that the sources of national economic growth are performing well, including through the government’s flagship programmes such as the Free Nutritious Meals initiative and the private sector, which has been boosted by the Prabowo administration. “The government’s contribution to the economy through spending is only about 7.7%. The rest is the private sector,” Purbaya said. He added that if the private sector had not shown movement, the national economy would not have grown by 5.61% in the first quarter of 2026. “This shows that the President’s strategy to build the economy in both the government and private sectors is working well. That is something many people often forget,” Purbaya added. Purbaya also stressed that public purchasing power is showing a positive trend, reflected in consumption data and automotive sales, indicating that the Indonesian economy is still expanding and far from heading towards a crisis like 1998. Furthermore, government stimulus such as the 13th-month salary for civil servants and pensioners has also successfully supported the national economy. “So, it is far from the impression that we are heading towards a 1998-like crisis. Our economy is expanding, perhaps above 5.4% or more. We will see because the data is not out yet,” Purbaya asserted.