Interior Minister Tito Urges Regional Administrations to Accelerate Regional Budget Spending to Stimulate Economic Growth
Interior Minister Muhammad Tito Karnavian has urged regional administrations (Pemda) throughout Indonesia to accelerate the realisation of their regional budget expenditure (APBD). This measure is considered vital to promote the circulation of money within society whilst stimulating national economic growth.
According to Tito, government spending plays a strategic role as a primary driver of the economy alongside private sector activity.
“Government spending is the main spending, not only for the circulation of money but also to stimulate the private sector,” he explained during a Coordination Meeting on Inflation Control combined with an Evaluation of Regional Government Support for the Three Million Houses Programme at the Riau Islands Provincial Government Office Auditorium on Monday, 9 March 2026.
High Spending Drives Economic Circulation
Tito elaborated that ideal regional financial management occurs when regional revenues are high and accompanied by optimal spending realisation. Under such circumstances, funds available to government can circulate quickly within society and stimulate economic activity.
He extended his appreciation to several regions that have successfully maintained this balance.
One example is West Java, which has recorded revenue realisation of 16 per cent with spending realisation reaching 15 per cent.
Conversely, Tito also highlighted several regions with high revenues but suboptimal regional spending realisation. This situation results in APBD funds remaining trapped in banks rather than being utilised for development.
“Well, when revenues are high but spending is low, yes, thankfully there are savings, but spending is low. Money circulation does not move sufficiently,” he said.
Appreciation for Riau Islands Economic Growth
Tito specifically commended the economic achievements of Riau Islands province. He assessed the region’s economic growth as very strong, having reached 7.89 per cent year-on-year.
This figure far exceeds the national average economic growth rate of approximately 5.39 per cent in the fourth quarter of 2025.
Additionally, the inflation rate in Riau Islands remains well controlled. In February 2026, annual inflation in the province stood at 3.54 per cent.
“This is quite good and controlled. Month-on-month inflation in Riau Islands province is also performing well,” he concluded.
Through accelerating APBD spending realisation, the government hopes that the wheels of regional economies can move more quickly whilst strengthening the recovery and growth of the national economy.