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Minister of Finance (Minister) Purbaya Yudhi Sadewa at the Presidential Palace in Jakarta, Tuesday (16/9/2025).
REPUBLIKA.CO.ID, JAKARTA — Indonesia will widen its 2026 state budget deficit to 2.68 percent of gross domestic product (GDP). The Budget Committee (Banggar) of the House of Representatives (DPR) and the government have agreed to widen the 2026 state budget deficit from 2.48 percent. This amounts to Rp689 trillion, up from the previous Rp638.8 trillion.
“The initial deficit was Rp638.8 trillion, and it has now been adjusted to Rp689 trillion. The deficit-to-GDP ratio has increased from 2.48 percent to 2.68 percent, or an additional 0.2 percentage points,” said Banggar Chairman Said Abdullah during a meeting with Finance Minister Purbaya Yudhi Sadewa and Bank Indonesia Governor Perry Warjiyo at the Parliament Complex on Thursday (18/9/2025).
The wider deficit was driven by higher state spending, which rose by Rp56.2 trillion from Rp3,786.5 trillion to Rp3,842.7 trillion. The largest increase came from transfers to regions (TKD), which jumped by Rp43 trillion to Rp693 trillion.
“The Rp43 trillion increase in TKD reflects requests from various commissions and regional aspirations, bringing the total to Rp693 trillion,” Said explained.
In addition to TKD, ministry and agency spending rose by Rp12.3 trillion to Rp1,510.5 trillion, while non-ministerial spending increased by Rp900 billion to Rp1,639.2 trillion.
On the revenue side, the government has set a higher target of Rp3,153.6 trillion, up Rp5.9 trillion from the previous projection. Tax revenues are expected to rise by Rp1.7 trillion, while non-tax state revenues (PNBP) will increase by Rp4.2 trillion.
Finance Minister Purbaya Yudhi Sadewa stressed that the increase in TKD is needed to ease fiscal pressure in the regions. “Previously, regional governments were dissatisfied because their budgets were cut too deeply, which led them to raise local taxes. We need to respond to that,” he said.
With this agreement, Banggar and the government will move forward with the 2026 State Budget Bill to the next stage of deliberation before it is passed into law.
