Lawmakers Hike 2027 Budget to $258 Billion as Fiscal Deficit Holds Steady at 2.4%

JAKARTA, Investortrust.id — The Indonesian government and parliament have agreed to lift both state revenue and expenditure targets in the 2027 draft state budget by Rp 9.1 trillion ($572.33 million), balancing higher public outlays against stepped-up tax collection efforts.

The compromise locks in total planned state spending at Rp 4,106.3 trillion ($258.26 billion), expanding resource distribution across central government institutions.

Emerging-market investors closely monitor Southeast Asia’s largest economy for signs of fiscal slippage, particularly as public spending programs expand. By matching higher expenditures with equivalent revenue targets, fiscal authorities are defending credibility by holding the budget deficit to 2.4% of gross domestic product—well within the legally mandated 3% threshold.

Despite the upward adjustments on both sides of the ledger, policymakers emphasized that overall sovereign borrowing targets will remain unchanged.

"Budget financing has no changes at Rp 671.6 trillion ($42.24 billion)," said Said Abdullah, chairman of the House of Representatives Budget Committee (Banggar DPR RI), speaking to reporters in the parliamentary budget committee room in Jakarta on Monday, Sept. 7, 2026.

Said outlined that projected state revenue and grants have been revised upward from an initial draft of Rp 3,426 trillion ($215.47 billion) to Rp 3,435.1 trillion ($216.04 billion). On the expenditure side, central line-ministry and agency allocations increased to Rp 1,513.8 trillion ($95.21 billion), lifting the total federal outlay to the agreed Rp 4,106.3 trillion level.

Revenue Revisions and Tax Targets

The increased fiscal headroom will be supported by higher anticipated inflows from domestic taxation and non-tax state revenue (PNBP). Under the revised layout, parliament and the finance ministry agreed to raise primary tax collection targets to Rp 2,593.4 trillion ($163.11 billion), while boosting customs and excise collection targets to Rp 318.6 trillion ($20.04 billion).

Finance Minister Purbaya Yudhi Sadewa signaled that the expanded budget targets will be supported by tighter operational efficiency and strengthened administrative enforcement across key fiscal collection bodies.

"It seems we can still manage this if we tidy up our tax, customs, and non-tax revenue collections a bit," Purbaya said following the parliamentary working session.

The 2027 Fiscal Layout

The revised 2027 state budget balance sheet establishes total state revenue and grants at Rp 3,435.1 trillion ($216.04 billion). This consists of aggregate tax revenues of Rp 2,912 trillion ($183.14 billion), non-tax state receipts of Rp 522.5 trillion ($32.86 billion), and international grant receipts of Rp 700 billion ($44.03 million).

On the absorption side, total approved spending of Rp 4,106.3 trillion ($258.26 billion) divides into central government outlays of Rp 3,371.3 trillion ($212.03 billion) alongside regional transfer funds (TKD) of Rp 735 trillion ($46.23 billion) distributed to provincial and district administrations nationwide.