Purbaya: Inflation to Be Managed Within 1.5-3.5 Percent Range

Finance Minister Purbaya Yudhi Sadewa has stated that inflation will be managed within a range of 1.5 per cent to 3.5 per cent to support higher economic growth. Inflation control is being achieved through fiscal and monetary policy synergy to maintain supply and community price stability, especially for food and energy. ‘The government also continues to anticipate the risk of imported inflation through coordination with the central bank,’ Purbaya said during a working meeting with Commission XI of the House of Representatives on Wednesday, 10 June 2026. He also stated that synergy and coordination between central and regional governments and monetary authorities through central and regional inflation control teams continue to be strengthened to ensure the effectiveness of inflation control. According to Purbaya, coordination between fiscal and monetary policy is continuously being reinforced to ensure the policies run in harmony without causing a crowding-out effect, so that economic and financial market stability can be maintained to support economic growth. He estimated that the global situation is increasingly improving. In line with this, Purbaya said the yield on 10-year government bonds (SBN) is under control in the range of 6.5 per cent to 7.3 per cent. Purbaya also stated the government continues to strengthen coordination between fiscal and monetary policy to maintain stability while preserving economic growth momentum amid pressure on the rupiah exchange rate. He hopes this will increase market confidence, thereby strengthening the domestic supply of foreign exchange, including through the recently revised policy on natural resource export proceeds (DHE SDA). He forecast that the geopolitical conflict involving Iran and the US-Israel war will further de-escalate and global economic growth will improve. Based on these considerations, the government estimates the rupiah will remain stable in the range of Rp 16,800 to Rp 17,500 per US dollar in 2027. He said that with the right economic strategy and prudent and sustainable fiscal policies, the government is optimistic the Indonesian economy in 2027 can grow strongly within a range of 5.8 per cent to 6.5 per cent. This, according to Purbaya, serves as a strong foundation towards achieving 8 per cent growth in the medium term. He is also optimistic that inflation will be controlled in the range of 1.5 to 3.5 per cent. With well-maintained economic and financial sector stability, the 10-year government bond yield is expected to be in the 6.5 per cent to 7.3 per cent range. Sustained global investor confidence will drive increased capital inflows, contributing positively to the rupiah exchange rate against the US dollar, which is projected to remain stable in the range of Rp 16,800 to Rp 17,500 per US dollar. Purbaya also noted that the 2027 fiscal policy architecture is designed to remain collaborative, targeted and measured, with a deficit of 1.8 per cent to 2.4 per cent of GDP. To support this, state revenue is projected in the range of 11.82 per cent to 12.40 per cent of GDP, whilst state expenditure is planned at 13.62 per cent to 14.80 per cent of GDP.