Government targets 5.8–6.5 per cent economic growth in 2027

The government is targeting national economic growth in the range of 5.8 per cent to 6.5 per cent in the 2027 Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF). “With the right economic strategy and prudent, sustainable fiscal policy, the government is optimistic that Indonesia’s economy in 2027 can grow strongly in the range of 5.8 per cent to 6.5 per cent,” said Finance Minister Purbaya Yudhi Sadewa during a working meeting with the House of Representatives’ Budget Committee in Jakarta on Tuesday. To navigate a global dynamic still full of uncertainty, the government has prepared a number of strategic policies. These include maintaining the price stability of subsidised fuel and food, guaranteeing energy availability and rice stocks, and keeping the State Budget (APBN) deficit below 3 per cent of Gross Domestic Product (GDP). Further measures involve improving state spending efficiency, optimising natural resource-based revenues, providing stimulus to protect public purchasing power, accelerating budget absorption, and strengthening fiscal and monetary policy synergy. Accordingly, the basic macroeconomic assumptions for 2027 have been set as follows: economic growth of 5.8 to 6.5 per cent; inflation at 1.5 to 3.5 per cent; the 10-year government bond yield at 6.5 to 7.3 per cent; the rupiah exchange rate at Rp16,800 to Rp17,500 per US dollar; Indonesian crude oil price at US$70 to US$95 per barrel; crude oil lifting at 602,000 to 615,000 barrels per day; and natural gas lifting at 934,000 to 977,000 barrels of oil equivalent per day. The Finance Minister stated that fiscal policy in 2027 will be focused on driving higher economic growth while accelerating improvements in public welfare. The 2027 fiscal posture has been detailed as follows: an APBN deficit in the range of 1.8 to 2.4 per cent of GDP; state revenue at 11.82 to 12.40 per cent of GDP; and state expenditure at 13.62 to 14.80 per cent of GDP. In the area of social welfare, the government has set development target indicators including a poverty rate of 6 to 6.5 per cent, an extreme poverty rate of 0 per cent, an open unemployment rate of 4.3 to 4.87 per cent, a Gini ratio of 0.362 to 0.367, a human capital index of 0.575, a farmer welfare index of 0.8038, and a formal job creation proportion of 40.81 per cent.