Interior Minister Urges Regional Governments to Accelerate Budget Spending to Drive Economic Growth
Interior Minister (Mendagri) Muhammad Tito Karnavian has urged regional governments (pemda) to accelerate the realisation of regional budget expenditures (APBD) to stimulate the national economy.
He emphasised that government spending is a principal instrument in promoting money circulation among the public whilst simultaneously mobilising the private sector.
“Because government spending is primary spending, it generates money circulation and stimulates the private sector,” said Tito in a press release received by Kompas.com on Monday (9 March 2026).
The statement was made by Tito 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 in Tanjungpinang on Monday (9 March 2026).
He explained that ideal regional financial management is characterised by high revenues followed by equally high expenditure realisations, thereby increasing money circulation among the public and driving economic growth.
West Java Province is one example, recording revenue realisation of 16 per cent and expenditure of 15 per cent.
Conversely, Tito expressed regret that some regions had achieved fairly high revenues but failed to optimally realise their spending. Consequently, APBD funds that should have been used for development often remained deposited in banks.
“If revenues are high but spending is low, well, alhamdulillah we have savings, but spending is low. Money circulation does not move enough,” said Tito.
Specifically for Riau Islands Province, he commended the success of the regional government in recording year-on-year economic growth of 7.89 per cent.
Additionally, the inflation rate in February 2026 year-on-year in the province was also sufficiently controlled, at 3.54 per cent.
“This is quite good and controlled. And month-on-month inflation is also quite good,” Tito concluded.