Government and Parliament Agree on 2027 State Expenditure at Rp4,106.26 Trillion

The Government and the House of Representatives (DPR RI) have agreed to an increase in state expenditure within the 2027 State Budget (APBN) by Rp9.07 trillion, rising to Rp4,106.26 trillion from the previous estimate of Rp4,097.19 trillion.

In detail, state expenditure consists of central government expenditure amounting to Rp3,371.26 trillion and transfers to regions (TKD) amounting to Rp735 trillion.

“The increase in state expenditure is intended to support various national priority work programmes,” said the Chairman of the DPR RI Budget Committee (Banggar), Said Abdullah, in Jakarta on Tuesday.

Nevertheless, Said ensured that the increase in both state revenue and expenditure targets will not alter the 2027 APBN deficit target, which is maintained at 2.4 per cent of Gross Domestic Product (GDP).

He explained that the increase in state expenditure is accompanied by an increase in state revenue through tax receipts and non-tax state revenue (PNBP).

State revenue has been agreed at Rp3,435.10 trillion, an increase of Rp9.07 trillion from the previous Rp3,426.03 trillion. Specifically, tax revenue is set at Rp2,911.95 trillion, up by Rp4 trillion from the previous Rp2,907.95 trillion, while PNBP is pegged at Rp522.48 trillion, an increase of Rp5.07 trillion from the previous Rp517.41 trillion.

“We are following through with the responsibility to raise state revenue targets through the two pillars of state revenue: taxation and non-tax state revenue (PNBP). Thus, the increase in state expenditure will not be burdened onto debt financing,” said Said.

Said explained that the increase in state revenue targets, particularly through the taxation sector, will focus on improving governance, law enforcement, the use of technology, as well as natural tax growth and high economic growth.

“The expansion of the tax base must also be handled carefully so as not to burden the economic lives of the people,” he clarified.

Furthermore, the Government and the DPR Budget Committee have agreed on the macro-economic basic assumptions for the 2027 APBN, which include an economic growth rate of 6.0 per cent, inflation at 2.5 per cent, and a 10-year Sovereign Bond (SBN) interest rate of 6.9 per cent.

Additionally, the Rupiah exchange rate is set at Rp17,500 per US dollar, the Indonesian Crude Price (ICP) at 75 US dollars per barrel, oil lifting at 612,500 barrels per day, and gas lifting at 954,000 barrels of oil equivalent per day.