Jakarta. Indonesia closed 2025 with a wider state budget deficit after the government opted to keep fiscal support in place to sustain economic momentum amid global uncertainty.

The deficit reached Rp 695.1 trillion ($41.35 billion) as of Dec. 31, 2025, after state revenue totaled Rp 2.75 quadrillion ($163.63 billion) and spending rose to Rp 3.45 quadrillion. The shortfall equaled 2.92% of GDP, remaining within Indonesia’s 3% fiscal cap,

Finance Minister Purbaya Yudhi Sadewa said the final figure exceeded both the government’s latest outlook and the original 2025 budget target of 2.53%.

“The deficit is larger than initially planned, but it remains within Indonesia’s fiscal rules,” Purbaya said at the January 2026 APBN KiTa briefing in Jakarta. “This increase reflects our decision to keep the economy expanding despite persistent external headwinds.”

The deficit widened from Rp 560.3 trillion in the previous month and rose from Rp 507.8 trillion recorded at the end of 2024.

By the end of 2025, government financing had reached Rp 744 trillion, while the primary balance posted a deficit of Rp 180.7 trillion.

Purbaya added that the government could have narrowed the deficit by cutting spending, but said such a move would have risked undermining domestic demand and slowing the economy.

“If we reduce spending simply to compress the deficit, the impact would be counterproductive,” he said.

On the revenue side, taxes and customs and excise remained the main contributors, generating Rp2.21 quadrillion, including Rp1.92 quadrillion in tax receipts and Rp300.3 trillion from customs and excise duties. Non-tax state revenue reached Rp534.1 trillion, while grants contributed Rp4.3 trillion.

“Tax revenue amounted to only Rp 1,92 trillion, just 87.6% of the state budget target,” Purbaya said.

Total state spending amounted to Rp 3.45 quadrillion, comprising Rp 2.60 quadrillion in central government expenditure and Rp 849 trillion in transfers to regional administrations. Central government spending included Rp 1.5 quadrillion for ministries and agencies and Rp 1.1 quadrillion for non-ministerial outlays.

“State spending remains flexible and aligned with priority programs aimed at improving public welfare,” Purbaya said.

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