Indonesian Political, Business & Finance News

Government targets 5.8–6.5 per cent economic growth in 2027

| Source: ANTARA_ID Translated from Indonesian | Economy
Government targets 5.8–6.5 per cent economic growth in 2027
Image: ANTARA_ID

With the right economic strategy and prudent, sustainable fiscal policies, the government is optimistic that the Indonesian economy can grow strongly in 2027 within the range of 5.8 per cent to 6.5 per cent, stated Finance Minister Purbaya Yudhi Sadewa during a working meeting with the House of Representatives (DPR RI) Budget Committee in Jakarta on Tuesday.

To navigate ongoing global uncertainties, the government is preparing several strategic policies. These include maintaining price stability for subsidised fuel (BBM) and food, ensuring energy availability and rice stocks, and controlling the State Budget (APBN) deficit to below 3 per cent of Gross Domestic Product (GDP).

Furthermore, the government aims to increase state spending efficiency, optimise resource-based revenues, provide stimuli to maintain public purchasing power, accelerate budget absorption, and strengthen the synergy between fiscal and monetary policies.

Accordingly, the macroeconomic assumptions for 2027 have been established as follows:

  • Economic growth: 5.8 per cent to 6.5 per cent

  • Inflation: 1.5 per cent to 3.5 per cent

  • 10-year SBN interest rate: 6.5 per cent to 7.3 per cent

  • Exchange rate: IDR 16,800 to IDR 17,500 against the US dollar

  • Indonesian crude oil price: US$70 to US$95 per barrel

  • Crude oil lifting: 602,000 to 615,000 barrels per day

  • Natural gas lifting: 934,000 to 977,000 barrels of gas equivalent per day

The Finance Minister stated that the 2027 fiscal policy will focus on driving higher economic growth while simultaneously accelerating the improvement of public welfare.

The 2027 fiscal posture is detailed as follows:

  • State Budget deficit: 1.8 per cent to 2.4 per cent of GDP

  • State revenue: 11.82 per cent to 12.40 per cent of GDP

  • State expenditure: 13.62 per cent to 14.80 per cent of GDP

In terms of social welfare, the government has set the following development target indicators:

  • Poverty rate: 6 per cent to 6.5 per cent

  • Extreme poverty rate: 0 per cent

  • Open unemployment rate: 4.3 per cent to 4.87 per cent

  • Gini ratio: 0.362 to 0.367

  • Human capital index: 0.575

  • Farmer welfare index: 0.8038

  • Proportion of formal job creation: 40.81 per cent

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