Jakarta. Indonesia will raise spending on ministries and government agencies by Rp 9.1 trillion ($515.68 million) in the proposed 2027 state budget, as the government seeks to accommodate additional spending while facing limited fiscal room.

The government and the House of Representatives agreed to increase the allocation for ministries and agencies to Rp 1,513.8 trillion, from Rp1,504.7 trillion previously. The increase is part of a broader Rp9.1 trillion rise in total state spending, which will reach Rp 4,106.3 trillion from Rp 4,097.2 trillion.

Finance Minister Purbaya Yudhi Sadewa said the government could not simply approve every request for additional funding because state resources are limited.

“If we had money like they do in heaven, I would give it all. But we have limitations. That is economics — we always face scarcity.” Purbaya told reporters at the House of Representatives complex in Jakarta on Monday.

He said the government therefore had to determine which programs and institutions would provide the greatest benefit to the economy.

“We have to choose what is most optimal for the economy. That is what we are doing,” he said.

The additional ministry and agency spending comes as the government and lawmakers also raise the 2027 state revenue target by Rp 9.1 trillion to Rp 3,435.1 trillion from Rp 3,426 trillion.

The adjustment allows the government to keep its budget deficit target unchanged at Rp671.2 trillion, or 2.4% of gross domestic product, despite the higher spending.

The higher revenue target includes an additional Rp5.1 trillion in non-tax state revenue (PNBP), bringing the target to Rp522.5 trillion.

The government also raised its tax revenue target by Rp 2 trillion to Rp 2,593.4 trillion, while the target for customs and excise revenue was increased by Rp 2 trillion to Rp 318.6 trillion.

Purbaya said the government would seek to improve revenue collection while making spending more efficient.

“We have been asked to improve efficiency in some areas or increase performance in others. It seems we can still make some improvements in taxes, customs and excise, and PNBP,” he said.

The revised budget puts total central government spending at Rp 3,371.3 trillion, consisting of Rp 1,513.8 trillion for ministries and agencies and Rp 1,857 trillion for non-ministerial spending. Transfers to regional governments remain at Rp 735 trillion.

The additional allocations are still subject to further discussions, with lawmakers and the government continuing to review individual ministry and agency budgets.

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