Indonesia Passes 2026 State Budget with Deficit Set at 2.68% of GDP
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JAKARTA, Investortrust.id — Indonesia’s House of Representatives has passed the 2026 state budget into law, setting a deficit of Rp 698.15 trillion, or $41.8 billion, equal to 2.68% of gross domestic product. The figure is wider than the 2.48% target in the draft bill and the 2.53% gap in the 2025 budget, but narrower than the 2.78% projected in the 2025 outlook.
House Speaker Puan Maharani confirmed the approval during the fifth plenary session of the 2025–2026 sitting period in Jakarta on Tuesday, Sept 23, 2025. “We now ask for the approval of the factions on the 2026 State Budget. Can it be agreed to become law?” she said, followed by a resounding “Agreed!” from 293 lawmakers in attendance.
Chairman of the Budget Committee Said Abdullah said the macroeconomic assumptions embedded in the budget would serve as the government’s foundation to drive growth. “The committee supports the government’s push for higher growth. The administration is targeting 7–8% in the long term,” he said, while cautioning that inflation and currency stability must be safeguarded to prevent shocks in the real sector.
Finance Minister Purbaya Yudhi Sadewa underscored that the budget is designed to balance fiscal discipline with growth stimulus, serving both as a short-term shock absorber for low-income households and a tool to advance structural reforms.
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The 2026 budget assumes 5.4% economic growth, 2.5% inflation, a rupiah at Rp 16,500 per dollar, a 6.9% yield on 10-year government bonds, and an Indonesian crude oil price of $70 per barrel. Oil lifting is set at 610,000 barrels per day, while gas lifting is targeted at 984,000 barrels of oil equivalent.
Welfare indicators include reducing open unemployment to 4.44–4.96%, poverty to 6.5–7.5%, and extreme poverty close to zero. The Human Capital Index is projected at 0.57, while the Gini ratio is expected at 0.377–0.380.
Total state revenue is set at Rp 3,153.58 trillion, dominated by Rp 2,693.71 trillion in tax receipts. Expenditure is planned at Rp 3,842.72 trillion, with Rp 3,149.73 trillion for central government spending and Rp 692.99 trillion in transfers to regions. Financing needs are estimated at Rp 689.15 trillion.
Said emphasized that beyond fiscal stability, the budget must spur small business activity, logistics, tourism, and creative industries, while revitalizing manufacturing sectors such as textiles, agriculture, and energy. He added that downstreaming industries would accelerate Indonesia’s industrialization.