Indonesia Approves Record Rp4,106 Trillion 2027 Budget: Full Breakdown

Jakarta, September 30, 2026 — Indonesia has approved its 2027 state budget, setting government expenditure at a record nominal level of Rp4,106.26 trillion.

The House of Representatives passed the 2027 State Budget Bill during a plenary session on Tuesday, September 29, following deliberations between the government and lawmakers.

The budget sets a state revenue target of Rp3,435.10 trillion, leaving a planned fiscal deficit of Rp671.16 trillion, equivalent to 2.4% of gross domestic product (GDP).

The spending plan is larger than Indonesia's previous annual budget allocations in nominal rupiah terms. It also reflects adjustments made during parliamentary discussions, with both revenue and expenditure raised by Rp9.07 trillion from the government's initial proposal.

A Rp671.16 Trillion Gap Between Revenue and Spending

The central feature of Indonesia's 2027 budget is the difference between its planned income and expenditure.

Government revenue is projected at Rp3,435.10 trillion, while total expenditure is set at Rp4,106.26 trillion.

That leaves a planned deficit of Rp671.16 trillion.

The government intends to cover the financing requirement through the budget financing framework established for the fiscal year.

The approved deficit is equivalent to 2.4% of GDP, below Indonesia's normal statutory ceiling of 3%.

A budget deficit does not mean that the government has already spent the entire amount or incurred the full shortfall. These figures are targets for the 2027 fiscal year, and the eventual outcome will depend on actual revenue, expenditure, and economic conditions.

Indonesia's Approved 2027 Budget at a Glance

The final fiscal framework is structured as follows:

The expenditure categories are hierarchical.

Ministry and non-ministry spending are components of central government expenditure, while regional transfers make up the remaining portion of the overall spending plan.

They should not be added separately to the Rp4,106.26 trillion headline figure.

Taxes Will Provide Most of the Revenue

Tax-related receipts are expected to remain the government's main source of income.

The 2027 target is Rp2,911.95 trillion, comprising Rp2,593.35 trillion in tax receipts and Rp318.60 trillion from customs and excise.

Non-tax state revenue is projected at Rp522.48 trillion.

This category includes income generated through government services, natural-resource management, and other legally recognized non-tax sources.

Grants are expected to contribute approximately Rp0.67 trillion.

The approved revenue plan will depend on economic activity, commodity-related receipts, taxpayer compliance, administrative performance, and other developments throughout the fiscal year.

Parliamentary Budget Committee Chairman Said Abdullah has emphasized the need for care when expanding the tax base so that revenue measures do not place additional pressure on households and economic activity.

That statement reflects the committee chairman's position during the budget discussions.

Parliament Increased Both Revenue and Spending

The final budget differs from the government's original submission.

The initial 2027 proposal contained Rp3,426.03 trillion in revenue and Rp4,097.19 trillion in expenditure.

Following parliamentary deliberations, both figures were increased by Rp9.07 trillion.

The additional revenue target consists of Rp4 trillion in tax-related receipts and Rp5.07 trillion in non-tax revenue.

Because the increase in planned revenue matches the increase in expenditure, the projected fiscal deficit remains unchanged at Rp671.16 trillion.

The adjustment therefore enlarged the spending envelope without increasing the deficit target compared with the original proposal.

Central Government Receives the Largest Allocation

Central government expenditure accounts for Rp3,371.26 trillion, approximately 82.1% of the total spending plan.

Of this amount, Rp1,556.89 trillion is allocated to ministries and government agencies.

A further Rp1,814.36 trillion is assigned to expenditure outside individual ministry and agency budgets.

The non-ministry category covers central government obligations and expenditure managed outside the standard ministry and agency structure.

Transfers to regional governments are set at Rp735 trillion, representing approximately 17.9% of total state expenditure.

These transfers form part of the national budget and are intended to support regional government financing under the applicable fiscal transfer arrangements.

Education, Social Protection and Food Security

Indonesia's Ministry of Finance has identified eight clusters of National Priority Work Programs for the 2027 fiscal year.

They cover food sovereignty; energy and water security; education; healthcare; downstream industries and industrialization; infrastructure, housing and disaster resilience; community-based economic development and villages; and poverty reduction.

The government has also published several thematic allocations.

Education is allocated Rp824 trillion, social protection Rp539.7 trillion, and food security Rp195.3 trillion.

These amounts represent policy-based budget classifications.

They may include spending administered by multiple government institutions and should not be interpreted as additional allocations outside the approved total.

Defense, security, law enforcement, public administration, digitalization, and economic diplomacy are also included among the supporting policy areas.

The eventual economic and social results of these allocations will depend on how programs are implemented and assessed during the fiscal year.

A Nominal Spending Increase From 2026

The 2027 expenditure plan is larger than the original 2026 budget of Rp3,842.7 trillion.

The difference is approximately Rp263.56 trillion.

That comparison is between the spending allocations in the original 2026 budget and the approved 2027 budget, rather than actual expenditure in either year.

The increase is smaller if the 2027 allocation is compared with the updated 2026 expenditure outlook.

This distinction matters because approved budgets, revised outlooks, and realized expenditure measure different stages of government finances.

A larger nominal budget also does not automatically establish how much the real volume of government services or investment will increase.

Inflation, implementation costs, and the composition of spending must be considered separately.

The Budget Assumes 6% Economic Growth

The fiscal framework is based on a set of economic assumptions agreed upon by the government and parliament.

Indonesia is targeting 6% economic growth in 2027, with inflation assumed at 2.5%.

The budget uses an exchange-rate assumption of Rp17,500 per U.S. dollar and a 6.9% yield assumption for 10-year government securities.

Indonesian crude oil is assumed to average US$75 per barrel.

Oil lifting is targeted at 612,500 barrels per day, while natural gas lifting is set at 954,000 barrels of oil equivalent per day.

These figures are planning assumptions rather than confirmed outcomes.

In particular, the Rp17,500 exchange-rate assumption is not a fixed exchange-rate policy or a guarantee that the rupiah will trade at that level.

Why Macroeconomic Assumptions Matter

Actual economic conditions can differ from the figures used to prepare the budget.

A change in the exchange rate may affect the rupiah value of foreign-currency-related obligations and transactions.

Oil prices can influence both energy-related revenue and government expenditure.

Changes in economic growth may affect tax collections, while government bond yields can influence financing costs.

As a result, the eventual fiscal position may differ from the approved 2.4% deficit target.

The budget's performance must therefore be evaluated using actual fiscal data as they become available during 2027.

The Primary Balance Remains Negative

Alongside the overall deficit, the 2027 budget projects a primary deficit of approximately Rp20.85 trillion.

The primary balance measures the government's fiscal position before interest expenditure is taken into account.

It is distinct from the headline deficit of Rp671.16 trillion.

Both figures provide information about the government's financing requirements, but they describe different aspects of the fiscal accounts.

The approved budget establishes the targets; their realization will only become clear as revenue is collected and expenditure is carried out.

What Happens After the Budget's Approval?

Parliamentary approval establishes the legal budget framework for the coming fiscal year.

The government will then implement expenditure and revenue measures through the relevant administrative and financial procedures.

Actual performance will be reported through budget realization data and subsequent fiscal reporting.

Those reports will show how much revenue has been collected, how much expenditure has occurred, and whether the deficit is tracking the approved target.

Bottom Line

Indonesia's 2027 state budget authorizes a record nominal spending allocation of Rp4,106.26 trillion.

State revenue is targeted at Rp3,435.10 trillion, leaving a projected fiscal deficit of Rp671.16 trillion, or 2.4% of GDP.

Central government expenditure accounts for Rp3,371.26 trillion, while transfers to regional governments total Rp735 trillion.

The budget was increased by Rp9.07 trillion on both the revenue and expenditure sides during parliamentary negotiations, leaving the original deficit target unchanged.

Its macroeconomic framework assumes 6% GDP growth, 2.5% inflation, and an exchange rate of Rp17,500 per U.S. dollar.

The approved budget sets Indonesia's fiscal targets for 2027. Actual spending, revenue, growth and public-service outcomes will depend on implementation and economic conditions throughout the year.