Indonesia Passes 2027 State Budget: What Are the Key Targets? - Tempo.co English
TEMPO.CO, Jakarta - The Indonesian parliament has passed the 2027 State Budget Bill into law on Tuesday, September 29, 2026, with unanimous approval from all party factions.
"The time has come for us to ask for the factions' approval of the 2027 State Budget Bill. May it be passed into law?" said House Speaker Puan Maharani.
The Chair of the House Budget Agency, Said Abdullah, explained the basic macroeconomic assumptions for the 2027 State Budget. The administration aims to lift the pace of economic growth to 6 percent, with a controlled inflation rate at 2.5 percent.
Abdullah said the higher economic growth target is necessary to bridge the expansion of Indonesia's economic pie. With a larger economic scale, the people are expected to increasingly benefit from production and consumption activities.
"It is indeed challenging; the administration will continue its strategy to raise the added value of exports and investment," he said, reading his report.
He also said household consumption remains the main pillar of the national gross domestic product structure, which necessitates a low inflation target.
Regarding the inflation target, the parliament shares the government's and Bank Indonesia's view that the rupiah exchange rate must be controlled. By 2027, Bank Indonesia and the government are keen to hold the rupiah stable at around 17,500 per US dollar.
"This is to ensure that pressure on the fiscal and real sectors is not sustained," he said.
Furthermore, the parliament and the government also agreed to set the interest rate on 10-year government securities at 6.9 percent, the price of Indonesian crude oil at US$75 per barrel, oil lifting at 612,500 barrels per day, and natural gas lifting at 954,000 barrels of oil equivalent per day.
The 2027 State Budget focuses beyond the economic growth, as Said mentioned that the people must not be left out of the development process.
The administration agreed on a list of key indicators of public welfare that must be achieved next year, including an open unemployment rate of 4.30-4.87 percent, a poverty rate of 6-6.5 percent, an extreme poverty rate of 0-0.5 percent, and a Gini ratio of 0.360-0.365.
The administration also targets for the human capital index to be 0.575, the farmer welfare index to be 0.8038, the farmers' terms of trade to be 126-128, the fishers' terms of trade to be 106-110, the proportion of formal employment to be 40.81 percent, the creation of 2.57-3.49 million new jobs, a GNI per capita of US$5,800-5,840 and Rp98.54-99.22 million, a 39.57 percent reduction in greenhouse gas emission intensity, and an environmental quality index of 76.84.
"The abovementioned 14 indicators measure a more comprehensive aspect of the relationship between the achievement of public welfare and environmental quality control as development mitigation," said Said Abdullah.
