Indonesian Political, Business & Finance News

Initial Overview of the 2027 Draft State Budget (RAPBN)

| Source: CNBC Translated from Indonesian | Economy
Initial Overview of the 2027 Draft State Budget (RAPBN)
Image: CNBC

The Budget Committee (Banggar) of the Indonesian House of Representatives (DPR RI) and the government have agreed on the basic macroeconomic assumptions and development indicators that will form the basis for drafting the 2027 Draft State Revenue and Expenditure Budget (RAPBN). This is intended to support the acceleration of inclusive economic growth and improve public welfare.

During the 23rd Plenary Session of the DPR RI for the 2025-2026 Session Year, Banggar Deputy Chairman Wihadi Wiyanto stated that in the discussion meeting on the 2027 Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF), Banggar and the government agreed on the RAPBN 2027, targeting economic growth in 2027 to reach approximately 5.8% to 6.5%.

Following this agreement, the government will use the range of the initial draft RAPBN 2027 as material to set the initial proposed figures for the Draft Law on the State Revenue and Expenditure Budget (RUU APBN) and its Financial Note on 16 August 2026. The 2027 RUU APBN will subsequently be discussed in greater detail with Commission XI of the DPR before being enacted into law at the end of October 2026.

In the initial agreement, the government and Banggar DPR agreed on a number of initial references for drafting the RAPBN 2027, including macroeconomic assumptions, development targets, and the macro fiscal posture.

The agreed macroeconomic assumptions are:

  1. Economic Growth: 5.8-6.5%

  2. Inflation Rate: 1.5-3.5%

  3. Rupiah Exchange Rate: Rp16,800 - Rp17,500 per US dollar

  4. 10-Year Government Bond Interest Rate: 6.5-7.3%

  5. Indonesian Crude Oil Price: US$70-95 per barrel

  6. Oil Lifting: 605-620 thousand barrels per day

  7. Natural Gas Lifting: 951-990 thousand barrels of oil equivalent

The agreed development targets for 2027 are:

  1. Poverty Rate: 6.0-6.5%

  2. Extreme Poverty Rate: 0%

  3. Gini Ratio: 0.362-0.367

  4. Open Unemployment Rate: 4.3-4.87%

  5. Human Capital Index: 0.575

  6. Farmer Welfare Index: 0.8038

  7. Proportion of Formal Job Creation: 40.81%

  8. GNI per capita: US$5,800-5,840

  9. Environmental Quality Index: 76.84

The agreed initial draft of the 2027 macro fiscal posture is:

  1. State Revenue: 12.01-12.40% of GDP

    1. Taxation: 10.16-10.50% of GDP

    2. Non-Tax State Revenue (PNBP): 1.85-1.89% of GDP

    3. Grants: 0.002-0.003% of GDP

  2. State Expenditure: 13.81-14.80% of GDP

    1. Central Government Expenditure: 11.26-12.01% of GDP

    2. Transfers to Regions: 2.55-2.79% of GDP

  3. Primary Balance: surplus of 0.45% of GDP to deficit of 0.14% of GDP

  4. Deficit: 1.8-2.4% of GDP

  5. Investment Financing: minus 0.50-0.90% of GDP

  6. Total Loans to GDP Ratio: 40.31-40.64% of GDP

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