Finance Commission XI of the House of Representatives (DPR) has approved the government’s projected budget deficit for the 2026 draft state budget (RAPBN), setting it between 2.48 percent and 2.53 percent of gross domestic product (GDP), lower than the revised 2025 outlook of 2.78 percent.

The approval came following a hearing on Monday, July 7, 2025, between Commission XI and the government, represented by Finance Minister Sri Mulyani Indrawati, National Development Planning Minister Suharso Monoarfa, Indonesian Central Bank (BI) Governor Perry Warjiyo, and Financial Services Authority (OJK) officials.

Hanif Dhakiri, deputy chair of the budget deficit working committee in Commission XI, said that while the committee acknowledged the government’s expansionary fiscal stance, it also appreciated the move to lower the deficit as a positive step toward greater fiscal discipline.

“The reduction of the deficit from the 2025 outlook of 2.78 percent to a target range of 2.5 percent for 2026 reflects a commitment to sound fiscal management,” Hanif told the meeting.

He emphasized, however, that the deficit cut must not compromise support for the government’s key priorities as outlined in President Prabowo Subianto’s Asta Citadevelopmental vision, which includes the free nutritious meals (MBG) program, strengthening cooperatives and micro, small and medium enterprises (MSMEs), and ensuring food and energy security.

“The government is also committed to maintaining deficit and debt levels within safe limits through transparent, accountable, and risk-conscious fiscal management,” Hanif added.

With the agreed deficit range, the government is targeting total state revenues at 11.71–12.31 percent of GDP. Tax revenues are projected to contribute 8.90–9.24 percent of GDP, while customs and excise are expected to account for 1.18–1.30 percent, and non-tax state revenues (PNBP) are forecast at 1.63–1.76 percent of GDP.

During the meeting, Finance Minister Sri Mulyani thanked the legislators and economic authorities for their detailed discussions in formulating the 2026 economic framework and fiscal policy priorities (KEMPPKF).

She also conveyed a message from President Prabowo Subianto, who is attending the BRICS Summit in Rio de Janeiro, Brazil. Citing utilitarian philosopher Jeremy Bentham, Prabowo called for the state budget to deliver “the greatest good for the greatest many.”

“Allow me to quote President Prabowo: ‘Greatest good for the greatest many.’ We hope that the state budget can fulfill this principle by providing maximum benefit to the people,” Sri Mulyani said.

The macroeconomic assumptions underlying the 2026 budget framework include:

•​Economic growth: 5.2–5.8 percent

•​10-year government bond yield: 6.6–7.2 percent

•​Exchange rate: Rp16,500–Rp16,900 per US dollar

•​Inflation: 1.5–3.5 percent

•​Poverty rate: 6.5–7.5 percent

•​Extreme poverty: 0–0.5 percent

•​Open unemployment: 4.44–4.96 percent

•​Gini ratio: 0.377–0.380

•​Formal employment creation: 37.95 percent