Indonesia's 2027 State Budget Draft: Prabowo's Spending Plans and Revenue Sources

President Prabowo Subianto has delivered the government’s statement on the Draft Law on the 2027 State Budget (RAPBN) and its accompanying Financial Note during a Plenary Session of the House of Representatives (DPR). In 2027, state revenue is projected to reach Rp3,426 trillion, growing by 6.8 per cent compared to the 2026 outlook. State expenditure is planned at Rp4,097.2 trillion, an increase of 3.9 per cent from the 2026 outlook. The budget deficit will be maintained at 2.40 per cent of gross domestic product (GDP), lower than the 2026 outlook of 2.85 per cent of GDP. The budget financing requirement stands at Rp671.2 trillion, down 8.6 per cent from the 2026 outlook. State expenditure consists of central government spending of Rp3,362.2 trillion and Transfers to Regions of Rp735.0 trillion. Central government spending in 2027 will focus on several priority programmes, such as Free Nutritious Meals (MBG), education, health, food security, energy, and social protection. The proposed Transfer to Regions in the 2027 RAPBN is Rp735.0 trillion, an increase of Rp42.0 trillion from the 2026 State Budget figure of Rp693.0 trillion. In percentage terms, the allocation rises by approximately 6.1 per cent and is equivalent to 2.6 per cent of GDP. This increase also reverses the trend after the Transfer to Regions in the 2026 outlook was recorded as declining by 17.9 per cent. Meanwhile, state revenue will be sourced from tax revenues of Rp2,908.0 trillion and non-tax state revenue (PNBP) of Rp517.4 trillion. The government also estimates grant revenue of Rp0.7 trillion. Tax revenues are supported by tax receipts of Rp2,591.4 trillion and customs and excise revenues of Rp316.6 trillion. The tax revenue target grows by 12.1 per cent compared to the 2026 outlook, while the average growth over the past ten years has been 7.76 per cent. Since 2008, tax revenue realisation has only exceeded 100 per cent of the target in the 2021-2023 period, buoyed by a commodity price boom. In contrast to tax revenues, customs and excise revenues are projected to decline by 1.2 per cent from the 2026 outlook. PNBP is also projected to fall by 10 per cent to Rp517.4 trillion. It is noted that the government is no longer relying on dividends from state-owned enterprises (BUMN) as a direct source of revenue, as their management has been transferred to the Danantara Investment Management Agency. The 2027 RAPBN will be deliberated in the House of Representatives (DPR) over 30 working days and enacted in a Plenary Session.