Indonesia’s January Budget Deficit Stands at 0.21% of GDP as Spending Accelerates

JAKARTA, Investortrust.id — Indonesia recorded a state budget deficit equal to 0.21% of gross domestic product in January 2026, the Finance Ministry said on Monday, Feb 23, 2026 in Jakarta, as early-year government spending outpaced revenue collection but remained within President Prabowo Subianto’s pledge to keep the annual shortfall below 3% of GDP.

The deficit amounted to Rp 54.6 trillion, equal to about $3.4 billion, which Finance Minister Purbaya Yudhi Sadewa described as “very controlled and within the design corridor of the 2026 budget.”

Revenue Holds Firm

State revenue reached Rp 172.7 trillion in January, or 5.5% of the full-year target, rising 9.5% from a year earlier.

Tax revenue and customs receipts totaled Rp 138.9 trillion, up 20.5% year over year, while non-tax state revenue stood at Rp 33.9 trillion, down 20.4% as some one-off components from last year did not repeat.

Purbaya said tax revenue alone grew 30.7% from a year earlier, which he attributed to improved collection efficiency.

“I hope this will continue,” he said during the February edition of the ministry’s monthly budget briefing.

Spending Surges Early in the Year

Government spending reached Rp 227.3 trillion, or 5.9% of the annual ceiling, marking a 25.7% increase from the same period last year.

The acceleration reflected front-loaded outlays to support priority programs, protect purchasing power and sustain growth in the first quarter, Purbaya said.

Spending by ministries and agencies jumped 128.9% to Rp 55.8 trillion, while non-ministerial spending rose 23.4% to Rp 76.1 trillion.

Transfers to regional governments totaled Rp 95.3 trillion, broadly flat with a 0.6% annual increase.

Debt Financing Remains Measured

To cover the deficit and other financing needs, the government raised Rp 127.3 trillion in debt financing as of Jan 31, equivalent to 15.3% of the full-year target of Rp 832.2 trillion.

Deputy Finance Minister Juda Agung said the figure was lower than the Rp 153.33 trillion raised in the same period last year, reflecting what he described as a more calibrated financing strategy.

“With adaptive discipline, we ensure financing supports budget stability while maintaining debt sustainability,” Juda said.

Most financing came from the domestic government bond market, where investor demand remained solid despite a recent decline in incoming bids at auctions.

The bid-to-cover ratio averaged 2.2 times for conventional bonds and 3.8 times for Islamic bonds in the first three auctions of the year, both higher than early 2025 levels, according to the ministry.

Flagship Social Program Expands

The early spending push also supported the government’s Free Nutritious Meals program, known by its Indonesian acronym MBG, one of President Prabowo Subianto’s signature initiatives.

Deputy Finance Minister Suahasil Nazara said Rp 36.6 trillion had been disbursed for the program, reaching 60.24 million beneficiaries through 23,678 nutrition service units nationwide as of Feb 21, 2026.

In 2025, the program distributed 4.5 billion meal portions and served 53.8 million beneficiaries, with Rp 51.5 trillion spent, or 72.5% of the allocated Rp 71 trillion.

“Our deficit remains below the limit we set ourselves, 3% of GDP,” Prabowo said on Friday, Feb 13, 2026, adding that he was determined “to work as hard as possible to reduce it.”

For now, January’s 0.21% of GDP shortfall suggests Indonesia is starting 2026 with faster spending but still within the fiscal guardrails its leadership has pledged to uphold.

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