Government and Parliament Agree on 2027 Economic Framework
The government and House of Representatives (DPR) Commission XI have agreed on the Macroeconomic Framework and Fiscal Policy Principles (KEM PPKF) for the 2027 Fiscal Year. Economic growth next year is targeted to increase while the state budget deficit is set to be lower.
Chairman of DPR Commission XI Mukhamad Misbakhun stated that 2027 economic growth is targeted at 5.8-6.5 percent of gross domestic product (GDP). The rupiah exchange rate against the US dollar was agreed at a range of 16,800-17,500. These exchange rate and economic growth assumptions are higher than this year’s targets.
The rupiah exchange rate remains a range and will be finalised once the DPR receives the first semester APBN report, to be compiled at the end of this semester. “Later we will find a single parameter,” Misbakhun said while reading the points of agreement during a meeting at the DPR building on Thursday, 11 June 2026.
Inflation next year will be maintained in the range of 1.5 to 3.5 percent. The government and DPR also agreed on a 10-year Government Securities (SBN) interest rate target for 2027 of 6.5 to 7.3 percent.
The open unemployment rate is targeted to fall to between 4.30 and 4.87 percent, while the poverty rate is to be reduced to a range of 6 to 6.5 percent. Extreme poverty is targeted at zero percent next year.
The Gini ratio was agreed at 0.362-0.367, and the human capital index at 0.575. Gross National Income per capita is set at US$5,800-5,840. The proportion of formal job creation is set at 40.81 percent and the environmental quality index at 76.84.
On the fiscal side, the 2027 budget deficit is set at 1.80 to 2.40 percent of GDP, lower than this year’s figure which is around 2.68 percent. In line with the lower deficit, the state revenue ratio to GDP next year is increased to a range of 12.01 to 12.40 percent.
Representing the government, Finance Minister Purbaya Yudhi Sadewa stated his agreement to all points of the 2027 KEM PPKF. To cover the budget deficit, innovative, prudent, and sustainable financing is required.
“The government consistently maintains fiscal discipline by controlling the deficit and debt within safe limits, namely a deficit below 3 percent of GDP and debt below 60 percent of GDP,” said Purbaya.