Jakarta. Indonesia's state spending reached Rp 1,969.6 trillion ($112.2 billion) in the first seven months of 2026, up 18.62% from the same period last year, Finance Minister Purbaya Yudhi Sadewa said Thursday.

Despite the higher spending, the fiscal deficit stood at Rp 235.6 trillion as of July, equivalent to 0.91% of gross domestic product (GDP).

The government expects the deficit to widen to Rp 734.3 trillion, or 2.85% of GDP, by the end of 2026 as spending accelerates during the remainder of the year.

“We're actually a little nervous. Previously, we said the deficit was still under control,” Purbaya told reporters at his office in Jakarta.

“The concern is that if ministries and government agencies know our deficit is only 0.91%, we'll soon be receiving massive requests for additional budgets,” he joked.

Purbaya said the Finance Ministry had carefully accounted for the expected widening of the deficit and that the country's fiscal position remained on track.

“Even with the current figures, the deficit will probably be around 2.85% of GDP, as we have planned,” he said.

“But this shows that we are trying to make fiscal policy more active without abandoning prudence.”

The Finance Ministry has also adjusted transfers to regional governments, providing an additional Rp 20.5 trillion to regions facing difficulties paying the salaries of contract workers.

Purbaya said the steady disbursement of government spending was also supporting economic activity.

Indonesia is targeting economic growth of 5.4% for 2026. The economy expanded 5.45% in the first half of the year.

“We want to push it even higher,” Purbaya said.

“There are still business processes that need to be improved, services that need to be accelerated, revenue that needs to be strengthened, and the quality of spending that must continue to improve. Therefore, we cannot be satisfied with what we have achieved.”

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