Indonesia unveils 2027 budget growth targets

Hartarto said the Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF), submitted by President Prabowo Subianto to parliament, was designed to support faster and higher economic growth.

“The 2027 state budget framework is directed toward fostering an economy that grows faster and higher,” Hartarto told a press conference in Jakarta.

The government targets state revenue at 11.82 percent-12.40 percent of gross domestic product (GDP), while state expenditure is projected at 13.62 percent-14.80 percent of GDP. The fiscal deficit is targeted at 1.8 percent-2.4 percent of GDP.

Under the macroeconomic assumptions, the government projects economic growth at 5.8 percent-6.5 percent in 2027, above the 5.4 percent target set in the 2026 state budget.

Inflation is forecast at 1.5 percent -3.5 percent, while yields on 10-year government bonds are projected at 6.5 percent -7.3 percent.

The rupiah is expected to trade between Rp16,800 and Rp17,500 per US dollar, equivalent to about US$1 for every Rp16,800-Rp17,500, weaker than the 2026 assumption of Rp16,500.

The government set crude oil price assumptions at US$70-US$95 per barrel, with oil lifting targeted at 602,000-615,000 barrels per day.

Natural gas lifting is projected at 934,000-977,000 barrels of oil equivalent per day.

The government aims to reduce the poverty rate to 6.0 percent -6.5 percent in 2027, from the 2026 target range of 6.5 percent-7.5 percent.

The open unemployment rate is targeted at 4.30 percent-4.87 percent, compared with the 2026 target of 4.44 percent -4.96 percent.

Indonesia also targets a human capital index of 0.575 in 2027, up from 0.57 in 2026, while the Gini ratio is projected at 0.362-0.367.

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Translator: Ahmad, Kenzu