Indonesia’s House of Representatives (DPR RI) and the government have officially passed the 2026 State Budget (APBN), setting the fiscal direction for the nation’s next economic chapter. With a total expenditure of Rp3,842.72 trillion, the budget reflects a balance between growth ambitions, social equity, and environmental responsibility. As global uncertainties persist, this budget aims to reinforce Indonesia’s resilience and inclusive development.
Key Facts & Background:
- Approval Process:
- Ratified during the 5th Plenary Session of DPR RI in Jakarta, led by Speaker Puan Maharani
- All parliamentary factions expressed support; the bill was unanimously approved
- Total State Expenditure (2026): Rp3,842.72 trillion
- Central government spending: Rp3,149.73 trillion
- Ministry/agency spending: Rp1,510.55 trillion
- Non-ministry spending: Rp1,639.19 trillion
- Transfers to regions: Rp692.99 trillion
- Central government spending: Rp3,149.73 trillion
- State Revenue Target: Rp3,153.58 trillion
- Tax revenue: Rp2,693.71 trillion
- Non-tax revenue (PNBP): Rp459.2 trillion
- Grants: Rp0.66 trillion
- Fiscal Deficit: Rp698.15 trillion (2.68% of GDP)
- Primary balance: Rp89.71 trillion
- Financing requirement: Rp689.15 trillion
- Macroeconomic Assumptions:
- GDP growth: 5.4%
- Inflation: 2.5%
- Exchange rate: Rp16,500/USD
- 10-year government bond yield: 6.9%
- Indonesian crude oil price (ICP): $70/barrel
- Oil lifting: 610,000 barrels/day
- Gas lifting: 984,000 barrels oil equivalent/day
- Social and Development Targets:
- Open unemployment rate: 4.44–4.96%
- Poverty rate: 6.5–7.5%
- Extreme poverty: 0–0.5%
- Gini ratio: 0.377–0.380
- Human Capital Index: 0.57
- Farmer Welfare Index: 0.7731
- Formal job creation: 37.95%
- Gross National Income (GNI) per capita: $5,520
- Emission intensity reduction: 37.14%
- Environmental Quality Index: 76.67%
Strategic Insights:
The 2026 APBN reflects Indonesia’s evolving priorities in a complex global landscape—balancing fiscal discipline with inclusive growth and environmental stewardship. The budget’s structure signals a commitment to strengthening public services, empowering regions, and accelerating infrastructure development, while maintaining a manageable deficit below 3% of GDP.
The allocation of over Rp1.5 trillion to ministries and agencies underscores the government’s focus on delivering core services, from education and healthcare to digital transformation and industrial policy. Meanwhile, the Rp692.99 trillion transfer to regions reinforces decentralization and local empowerment, ensuring that development reaches beyond urban centers.
Social indicators embedded in the budget—such as poverty reduction, job creation, and human capital development—highlight a people-centered approach. The ambitious targets for extreme poverty eradication and formal employment creation reflect Indonesia’s intent to build a more equitable and productive society. The inclusion of the Farmer Welfare Index and Human Capital Index also signals a shift toward measuring quality of growth, not just quantity.
On the environmental front, the budget’s commitment to reducing greenhouse gas emissions by 37.14% and improving environmental quality aligns with global climate goals and Indonesia’s own sustainability agenda. These targets are especially relevant as the country navigates energy transition, urbanization, and climate resilience.
The macroeconomic assumptions—moderate inflation, stable exchange rate, and realistic oil benchmarks—suggest a cautious optimism. The projected 5.4% GDP growth is ambitious yet attainable, provided that global conditions remain stable and domestic reforms continue.
In the long term, the 2026 APBN serves as a strategic instrument to guide Indonesia through economic modernization, social transformation, and environmental sustainability. Its success will depend on execution, transparency, and adaptive policymaking. As Indonesia positions itself as a regional leader, this budget lays the groundwork for a resilient, inclusive, and forward-looking economy.