Indonesia’s House of Representatives passed the 2027 State Budget into law on September 29, approving higher government spending and revenue targets as the government aims for economic growth of 6 percent next year. 

Total state expenditure for 2027 was set at IDR 4.106,26 trillion (around USD 229 billion), while state revenue is targeted at IDR 3.435,10 trillion. The resulting fiscal deficit is projected at 2,4 percent of gross domestic product (GDP), according to figures agreed by the government and the House. 

Compared with the latest estimates for the 2026 budget, spending is expected to increase by around 4 percent, while revenue is projected to rise by approximately 7 percent, Reuters reported. The revenue target was increased alongside expenditure during parliamentary deliberations to keep the planned deficit at 2,4 percent of GDP. 

Of the total expenditure, IDR 3.371,26 trillion is allocated for central government spending, while IDR 735 trillion is designated for transfers to regional governments. The government expects tax collections to contribute IDR 2.911,95 trillion to state revenue, while non-tax state revenue is targeted at IDR 522,48 trillion. 

The budget is based on an economic growth assumption of 6 percent for 2027 and an inflation rate of 2,5 percent. The rupiah is assumed to average IDR 17.500 per USD, while the yield on 10-year government securities is set at 6,9 percent. The Indonesian Crude Price assumption is USD 75 per barrel. Oil lifting is targeted at 612.500 barrels per day and gas lifting at 954.000 barrels of oil equivalent per day. 

The government has identified eight priority areas for fiscal policy in 2027, covering food sovereignty; energy and water self-sufficiency; education; healthcare; downstream industries and industrialization; infrastructure, housing and disaster resilience; strengthening the people’s economy and rural development; and poverty reduction. 

Finance Minister Suahasil Nazara said the 2027 fiscal policy had been designed to remain expansionary while keeping the deficit under control. The government has also cited global supply-chain disruptions, commodity-price volatility and high international interest rates among the external risks considered in preparing the budget.