Purbaya Hits the Brakes on Government Spending Next Year

The government appears set to implement large-scale spending cuts in 2027, as outlined by Finance Minister Purbaya Yudhi Sadewa during a working meeting with House of Representatives Commission XI in Jakarta on Wednesday (10/6/2026). In his presentation, Purbaya projected that government consumption will grow moderately at 4.3% to 7.7%, significantly lower than the 2026 outlook of 8.4% to 10%. Central government spending is planned at Rp 1,059.3 trillion, while the Transfer to Regions fund is set at Rp 306.1 trillion. Purbaya stated that promoting efficiency and refocusing expenditure is a key strategy for achieving economic growth of 5.8% to 6.5% in 2027. ‘The economy in 2027 is in the range of 5.8 to 6.5%, with a trajectory towards 8% in 2029,’ Purbaya said. He noted that achieving this growth target would be underpinned by a very strong acceleration in investment, especially in high-value sectors. To attract investment, Purbaya affirmed that deregulation efforts would continue. ‘These efforts are directed, among others, at simplifying licensing processes, strengthening legal certainty, and enhancing cross-sector and institutional coordination so that various structural barriers which have been hindering investment realisation can be removed,’ Purbaya explained.