The announcement of the 2026 Draft State Budget (RAPBN) posture is not only a concern for domestic businesses, but also for external stakeholders. Their views also vary on the revenue and expenditure targets in the 2026 Draft State Budget.
As we know, in front of the People's Consultative Assembly on Friday (15/8/2025), President Prabowo Subianto announced a state budget plan (RAPBN) of Rp 3,786.5 trillion and a state revenue target of Rp 3,147.7 trillion. As a result, there is a deficit equivalent to 2.48% of national gross domestic product (GDP) for the 2026 fiscal year.
Setting a growth target as high as 5.4%, President Prabowo projected that Indonesia would be poised to become the largest economic power in Southeast Asia.
With a macroeconomic framework that is almost the same as that announced in May, the GDP growth target is followed by the expectation that inflation will stabilize at 2.5% in 2026, with the possibility of rupiah depreciation kept under control by Bank Indonesia. In addition to these assumptions, the state revenue targets a 12.8% increase in tax revenue.
Chairman of the Korea Chamber of Commerce and Industry (Kocham) Indonesia Lee Kang Hyun said that his party realizes that the 2026 Draft State Budget posture puts the expenditure budget larger than the revenue. His concern is how the government can collect more taxes next year.
"In accordance with the direction of the country's president, we cannot comment. Hopefully (the budget) is used exactly as planned and is successful for the development of the country," Lee said when contacted by SUAR, Thursday (21/8/2025).
Indonesian Ambassador to Vietnam Denny Abdi shared his observations of Uncle Ho's successful experience in the high-tech industry. In fact, they started industrialization several decades late compared to countries in the region.
"There are many similarities [between Indonesia and Vietnam], for example, both have young populations, both have demographic bonuses, human development index and income per capita are relatively the same," he said when contacted by SUAR, Wednesday (20/08).
However, the Vietnamese Government allocates the acceleration of its investment by encouraging their national entrepreneurs to absorb thehigh-tech industry. "To become a developed country, high-tech industry is the key, because we cannot rely on income per capita, if the industry we build is still low-tech," he said.
He cited the example of a Vietnamese taxi company that entered Indonesia with a fleet of European electric cars. This expansion of the taxi business is a method to promote their products in Indonesia, the largest market in Southeast Asia, with an unmitigated vision: to rival Toyota's dominance in Indonesia.
"Imagine, a country whose independence is the same as ours, its entrepreneurs are already very focused and extraordinarily brave in investing," Denny said.
Not only in terms of market size, according to Denny, Vietnamese entrepreneurs tend to be more understanding and willing to follow similar bureaucratic flows between Indonesia and Vietnam. They see it as a challenge that is answered vigorously, not an obstacle for investors.
Vietnamese entrepreneurs tend to be more understanding and willing to follow the similar bureaucratic flow between Indonesia and Vietnam. They see it as a challenge that is answered vigorously, not an obstacle for investors.
"Vietnam's investment acceleration is an example of investment that focuses on improving the competitiveness of a nation in the future. That is what we need to emulate and do," he said.
Meanwhile, Indonesian Ambassador to Singapore Suryopratomo was reluctant to talk much about the posture of the 2026 Draft State Budget. However, he emphasized the importance of collaboration between the government, the business world, and all other stakeholders.
Rapid economic growth can be achieved with the role of government that places and gives high appreciation to the business world. He illustrated, if a business association holds an activity, the minister or prime minister almost always takes the time to attend as a form of support for the business world.
"Their presence gives the message, 'Tell us what we need to do to make you bigger. The bigger your business, the bigger our revenue'," says Tommy, Suryopratomo's nickname.
Overseas economist's view
Metodi Tzanov, an economist from Emerging Market Watch, an economic research institute based in Sofia, Bulgaria, believes that the government's ambitious projections need to be a little more realistic, especially considering that tax revenues will decline considerably by 2025.
In contrast, Tzanov sees non-tax state revenue (PNBP) sources sourced from SOE profits as a more realistic focus.
"However, state revenue from SOE profits is also very likely to decrease, because SOE profits will be directly managed by BPI Danantara, and the government only receives dividends from these profits in a small amount," he wrote in his article. post on his LinkedIn site, which he has given SUAR permission to quote.
In Tzanov's observation, state revenues are only targeting a 9.8% increase, but the central government's planned expenditure budget has soared by 17.8%. The allocation is mainly to finance the government's flagship programs, including the Free Nutritious Meal - which saw its budget allocation increase by Rp335 trillion.
However, the budget realization is predicted to be lower than the allocation, taking into account the value of MBG program spending this year, which was realized at IDR 7.9 trillion since the program began in January until mid-July 2025. If the decline in realization occurs, the budget deficit is expected to be reduced.
In addition to the fantastic amount, the proportion of the Free School Meal budget that takes up 44% of the total education budget of IDR 757.8 trillion has also received attention.
Targeting 82.9 million students through more than 30,000 nutrition service fulfillment units (SPPGs), the placement of the MBG budget in the education post is inappropriate and risky.
"The problem does not lie in the food itself, but rather where the budget is placed. By including the MBG in the education budget, the government is making the headline figure look high in order to meet the 20% constitutional requirement. However, if the MBG is removed from the total, the 'core' education budget is only IDR 422.8 trillion, a 36% decrease compared to 2024," said Leigh McKiernon, business consultant and founder of StratEx Indonesia Business Advisory in a post on LinkedIn, Tuesday (19/08), which SUAR also authorized to quote.
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Furthermore, McKiernon highlighted the allocation of the "core" education budget which did not show a significant increase. Especially the budget that has been supporting the operation of educational facilities, such as the School Operational Assistance (BOS) and the State Higher Education Operational Assistance (BOPTN). In contrast, a number of government flagship programs such as Sekolah Rakyat and SMA Unggul Garuda received significant increases in allocation.
"If only a handful of schools receive budget increases, while thousands of others continue to struggle with poor infrastructure, large education budgets will only give the impression of cosmetic change rather than supporting systemic change," McKiernon said.
For him, MBG is a good policy that needs to be supported. However, it is much more appropriate if the budget for it is not included in the education budget.
Despite the government's ambition, the allocation of US$38 billion in the Draft State Budget to accelerate investment and global trade shows President Prabowo's commitment to optimizing state revenue and Indonesia's readiness to receive foreign direct investment (FDI) after a recent decline.
In order for the commitments stated in the state budget to be realized, investment invitations need to be future-oriented, prioritizing inbound investment from the high-tech industry sector.
