Jakarta. President Prabowo Subianto has officially set the 2026 annual economic growth target at 5.4 percent, higher by 0.2 percentage points than what the country had aimed for this year.

The Indonesian leader also unveiled an ambitious plan of shrinking deficit down to zero within three years. Prabowo had just delivered the 2026 annual budget speech on Friday, the first of its kind since he rose to power last October. This much-awaited speech gave the public an overview of the economic targets that the country had set for the coming year. 

“With sound fiscal management, coupled with effective economic transformation and improved public welfare, we are aiming for an economic growth of 5.4 percent or higher in 2026,” Prabowo said at the parliamentary complex in Jakarta.

Southeast Asia’s largest economy intends to keep its inflation rate at 2.5 percent. Rupiah trading is expected to average at around Rp 16,500 per US dollar throughout 2026. 

The government plans to spend no more than Rp 3,786.5 trillion (around $234 billion) next year. It aims to amass Rp 3,147.7 trillion in state revenue throughout 2026, up by 9.8 percent from 2025 figures. 

Prabowo wants to keep the deficit at 2.48 percent of the gross domestic product (GDP), equivalent to around Rp 638.8 trillion. This is lower than the 2025 fiscal deficit forecasts of 2.78 percent. To keep deficits at a minimum, Prabowo will continue his budget austerity measures, further instructing ministries and government agencies to keep cutting non-essential spendings, including business trips. The retired army general is even upbeat about being able to balance the state budget by 2028.

“My dream is that I shall stand at this podium -- perhaps in 2027 and 2028 -- to announce that we have succeeded in achieving no deficit,” Prabowo said.

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