Purbaya Predicts 2026 State Budget Deficit Will Widen

Finance Minister Purbaya Yudhi Sadewa predicts that the 2026 State Budget (APBN) deficit will swell by Rp 45.2 trillion from the initial target of Rp 689.1 trillion. The state treasurer stated that the budget deficit for the year is projected to reach Rp 734.3 trillion, representing 2.85 per cent of Gross Domestic Product (GDP).

These remarks were made during his report on the first-semester APBN realisation and the second-semester prognosis for 2026 during a meeting with the House of Representatives Budget Committee (Banggar DPR) in Senayan, Jakarta, on Tuesday, 7 July 2026.

“The APBN deficit outlook is recorded at Rp 734.3 trillion, with a percentage of 2.85 per cent of GDP. Consequently, the budget financing outlook stands at Rp 734.3 trillion,” said Purbaya.

Previously, the government had targeted a 2026 APBN deficit of Rp 689.1 trillion, or 2.68 per cent of GDP. The increase in the deficit is caused by shifts in revenue and expenditure figures from the original targets.

In the latest report, he estimates that state expenditure by the end of 2026 will reach Rp 3,982.4 trillion, an increase from the previous target of Rp 3,842.7 trillion. This rise occurs across both central government spending and transfers to regional authorities.

The projected increase in expenditure is intended to support priority development programmes, maintain food price stability, and protect public purchasing power. Additionally, it aims to support regional government administration, disaster management, and additional special autonomy funds. “Furthermore, this expenditure outlook already accounts for an additional Rp 132 trillion for the payment of government obligations, subsidies, and compensation,” said Purbaya.

Meanwhile, state revenue by the end of the year is expected to reach Rp 3,208.1 trillion, up from the initial target of Rp 3,153.6 trillion. Although this figure has risen, tax revenue is predicted to reach only 98 per cent of its target. Tax receipts throughout 2026 are projected at only Rp 2,310.8 trillion against the initial target of Rp 2,357.7 trillion.

However, the Finance Minister stated that the government is striving to increase tax revenue beyond this projection. This will be achieved through tax official efficiency, improvements to the Coretax system, and procedural enhancements without introducing new taxes.

The government also ensured that the APBN deficit will remain below 3 per cent of GDP and that the projected 2.85 per cent deficit can still be reduced. “I am confident we can still bring this deficit down,” he said.