2027 State Budget Targets 6% GDP Growth with 2.4% Fiscal Deficit

2027 State Budget Targets 6% GDP Growth with 2.4% Fiscal Deficit 
The govt. plans IDR4,097.2 tn in 2027 state spending, up from IDR3,842.7 tn in 2026, with state revenue targeted at IDR3,426 tn. The macro assumptions include 6% GDP growth, 2.5% inflation, IDR17,500/USD exchange rate, 6.9% 10Y SBN yield, USD75/bbl ICP, 610k bpd oil lifting, and 954k boepd gas lifting. The fiscal deficit is projected at 2.40% of GDP, below the 2.68% target in 2026. Priorities include food and energy security, education, healthcare, downstreaming/industrialization, infrastructure and housing, rural development, and poverty reduction. (Setkab) 

Govt. Outlined Three Growth Engines for 2027 
The govt. outlined three growth engines for 2027, comprising high-value sectors through value-added development and stronger global supply chain integration, resilient sectors including agriculture and energy, and stronger investment and export competitiveness through deregulation and international agreements. The policy mix will be supported by fiscal and monetary policy synergies, investment acceleration through Danantara, and private-sector investment, with attractive investment climate, regulatory certainty, macro stability, and a prudent and sustainable APBN as key prerequisites. (Bloomberg Technoz) 

Govt. Planned to Consolidate Public Procurement to Save IDR 360 tn 
The govt. planned to consolidate central and regional govt. procurement to achieve IDR 360 tn in budget efficiency by 2027. LKPP will leverage digitalization to consolidate procurement volumes and standardize specifications, while procurement processes are planned to begin by end-26 with contracts signed in Jan-27. The target represents 30% of total govt. procurement spending of around IDR 1,200 tn. (Bloomberg Technoz) 

Govt. Kept ASN Salary Hike Under Discussion 
The govt. was still discussing a potential salary increase for ASN/PNS, with Finance Minister Purbaya Yudhi Sadewa stating that the plan had yet to be discussed in depth. The potential hike had previously been included in Presidential Regulation No. 79/2025 on the updated 2025 Govt. Work Plan, covering teachers, lecturers, healthcare workers, civil servants, TNI/Polri, and state officials. (Bloomberg Technoz)

Govt. Reduced Subsidized Fuel Quota to 20.09 mn KL in 2027 The govt. allocated IDR 549.9 tn for social protection in the 2027 RAPBN, which includes subsidized fuel spending. The subsidized fuel quota was reduced by 28.34 mn kiloliters (KL) or 58.5% YoY to 20.09 mn KL from 48.43 mn KL in 2026, mainly due to the lower assumed ICP of USD 75/bbl in 2027. The govt. also prepared incentives for 1 mn domestically produced electric motorcycles to reduce fuel consumption and energy imports. (Kontan)