FX.co ★ Indonesia’s 2026 Budget Forecasts a 2.48% Deficit

The Indonesian government projects a fiscal deficit of 2.48% of GDP for the fiscal year 2026, with a commitment to eliminate the deficit and achieve a balanced budget within three years. President Prabowo Subianto has proposed a budget of IDR 3,786.5 trillion (approximately USD 234 billion) for 2026, reflecting a 7.3% increase compared to the 2025 spending estimates. The government aims to generate revenues of IDR 3,147.7 trillion, a rise of about 9.8% from this year's forecasts. Prabowo presented his administration's inaugural budget to parliament on Friday, setting ambitious targets for GDP growth at 5.4% and inflation at 2.5%. Investors are particularly attentive to Prabowo's fiscal strategy, given his election promises that could entail significant expenditure and his previous statements suggesting a readiness to incur more debt to boost growth to 8% during his tenure. Prabowo assumed office last October, inheriting the 2025 budget set by his predecessor. Parliamentary review of budget proposals typically takes around a month. The fiscal deficit forecast for this year is...