Jakarta. Indonesia is targeting 6% economic growth in 2027 as President Prabowo Subianto unveiled a Rp 4,097.2 trillion ($230 billion) state budget that seeks to accelerate expansion while keeping the fiscal deficit at a relatively narrow 2.4% of gross domestic product.

The government’s macroeconomic assumptions underpinning the proposed budget include 2.5% inflation, a rupiah exchange rate of Rp 17,500 per US dollar and a 6.9% yield on 10-year government bonds. The growth target is above the 5.4% assumption set in the 2026 budget and comes as the economy continues to grow at around 5%.

State spending is projected to rise from Rp 3,842.7 trillion in the 2026 budget, while state revenue is expected to reach Rp 3,426 trillion, up from Rp 3,153.6 trillion this year. Budget financing is set at Rp 671.2 trillion, down from Rp 689.1 trillion in 2026.

“We do not choose between growth and prudence. We choose both. We do not choose between helping the people and maintaining the state budget. We do both,” Prabowo said in his speech to the House of Representatives on Friday in Jakarta.

Prabowo said the 2027 budget would be “expansive, collaborative, targeted and measurable” as his administration seeks to push growth higher while maintaining fiscal discipline.

The government will focus the budget on eight national priorities, including food sovereignty, energy and water self-sufficiency, education, health, boosting value-added industries and industrialization, infrastructure and housing, strengthening the people’s economy and village development, and poverty reduction.

Prabowo also stressed that fiscal discipline must continue through budget execution, with the government seeking to minimize revenue leakages and improve spending efficiency.

“If the goods are the same, we buy them together. If the needs can be planned, we plan them together,” he said, calling for the consolidation of government procurement to strengthen the state’s bargaining power.

The government estimates procurement consolidation, electronic catalogs and data-based planning could generate savings of up to 30% from Rp1,200 trillion in procurement spending, or around Rp360 trillion.

Alongside the growth target, the government aims to lower the poverty rate to 6%–6.5% in 2027 from 6.5%–7.5% this year, while targeting an open unemployment rate of 4.30%–4.87% and a Gini ratio of 0.362–0.367.

2027 State Budget Targets and Macro Assumption:

• Economic growth: 6%

• Inflation: 2.5%

• Rupiah: Rp17,500 per US dollar

• 10-year bond yield: 6.9%

• State spending: Rp4,097.2 trillion

• State revenue: Rp3,426 trillion

• Budget deficit: 2.4% of GDP

• Budget financing: Rp671.2 trillion

• Poverty rate: 6%–6.5%, down from 6.5%–7.5%

• Open unemployment: 4.30%–4.87%

• Gini ratio: 0.362–0.367

• Indonesian crude oil price (ICP): $75 per barrel

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