Jakarta. Indonesia's state spending reached Rp 1.65 quadrillion ($91.7 billion) in the first half of 2026, rising 17.8% year-on-year as the government accelerated budget execution to support economic growth and ensure spending was distributed more evenly throughout the year.

"The realization rate was only 38.8% at the same point last year, but it has now reached 43.1%. This reflects our efforts to ensure state spending is distributed more evenly throughout the year," Finance Minister Purbaya Yudhi Sadewa said during a hearing with the House of Representatives' Budget Committee on Tuesday.

Total state spending consisted of Rp 1.29 quadrillion in central government expenditure and Rp 357.4 trillion in transfers to regional governments. The spending is aimed at supporting stronger economic growth while financing development priorities and national flagship programs.

Central government spending climbed 29.4% year-on-year from Rp 1 quadrillion in the first half of 2025 to Rp 1.29 quadrillion this year.

Ministries and government agencies accounted for Rp 658.9 trillion of the total, driven by the implementation of the Free Nutritious Meals (MBG) program, social assistance, including health insurance premium subsidies for low-income households, food assistance, the Family Hope Program (PKH), and the Indonesia Smart College Card (KIP Kuliah).

"Central government spending was also used to pay civil servants' salaries, including the holiday allowance and the 13th-month salary," Purbaya said.

Meanwhile, non-ministry spending reached Rp 639.7 trillion, primarily allocated to subsidies and compensation payments for 2026, settlement of outstanding compensation from 2025, as well as holiday allowances and 13th-month pension payments for retirees.

"The increase in central government spending in 2026 has become a catalyst for supporting economic growth in the first half of the year," Purbaya said.

Transfers to regional governments totaled Rp 357.4 trillion, equivalent to 51.6% of the 2026 budget allocation. Although this marked an 11.2% decline from Rp 402.5 trillion a year earlier, Purbaya said the disbursement pace remained on track, with realization depending on local governments' ability to absorb budgets and deliver targeted outputs.

"Transfers from the central government to regional governments remain on track and are being disbursed more quickly. We will continue to oversee the distribution in the second half of the year," he said.

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