Purbaya signals continuation of budget efficiency into 2027

Finance Minister Purbaya Yudhi Sadewa has given a signal that the budget efficiency policy will be continued into the 2027 fiscal year. “The government remains committed to improving the quality of state spending through efficiency and refocusing efforts, so that budget allocations are more productive, on target, and able to provide a real impact on the economy and society,” Purbaya stated during the DPR Plenary Session in Jakarta on Tuesday. Under the 2027 Macroeconomic Framework and Fiscal Policy Principles (KEM PPKF), the government is targeting state spending within a range of 13.62 percent to 14.80 percent of gross domestic product (GDP). In managing state expenditure, the government is promoting the effectiveness of subsidies and social protection in safeguarding purchasing power and alleviating poverty. Purbaya noted that the government is gradually pushing for more targeted and equitable social assistance and subsidies, based on direct beneficiaries, utilising the National Socio-Economic Single Data (DTSEN) system. Empowerment-based social protection programmes are also continually encouraged and strengthened. Furthermore, synergy among social protection programmes across various ministries and agencies is being enhanced so that interventions become more integrated, complementary, and capable of delivering a more significant impact on improving public welfare. The government is also committed to increasing the effectiveness of central and regional spending by strengthening synergy and harmonisation between the two. This measure is directed at making regional spending more optimal in improving the quality of public services and development in the regions, as well as supporting the achievement of national priority programmes. In line with this, the strengthening of ministry and agency spending in regions is also continuously encouraged through programme synergy where the beneficiary locations are in the regions, such as accelerating the free nutritious meal programme, strengthening village/sub-district cooperatives, establishing people’s schools, and providing free health checks. Subsequently, in implementing Law Number 1 of 2022 on Financial Relations between the Central Government and Regional Governments, the government is pushing for more solid central-regional harmonisation. This is carried out while still providing flexibility in managing regional revenue and expenditure budgets to improve the quality of public services and the welfare of state civil apparatus in the regions.