DPR Approves the 2026 APBN worth Rp 3.842 trillion.

The House of Representatives finally approved the 2026 State Budget with a total expenditure of Rp 3,842.7 trillion. This decision was taken in a plenary session held in Jakarta on 23 September 2025 after lengthy deliberations between the government and the DPR’s Budget Agency. With this approval, the government obtains a legal basis to implement fiscal policy for next year.

The 2026 state budget includes government revenue of Rp 3,153.6 trillion and a deficit of 2.68 percent of Gross Domestic Product. That deficit figure remains below the statutory maximum of 3 percent. The economic growth target is pegged at 5.4 percent, higher than the 2025 projection, which sits at around 5.2 percent.

The government states that the 2026 state budget is designed to strengthen the resilience of the national economy while ensuring the continuity of development. President Prabowo Subianto emphasized that state spending is directed toward three main priorities, namely the improvement of the quality of human resources, the strengthening of food and energy security, and the equitable distribution of development across regions.

Budget Allocation Focus

Education has become one of the largest recipients of the budget, with an allocation of Rp 757.8 trillion. This fund covers a variety of scholarship programs, improvements in the quality of teachers and lecturers, as well as the development of educational facilities throughout Indonesia. The government hopes that such allocation will be able to increase the competitiveness of the younger generation amid global competition.

The Free Nutritious Meals Program has also drawn significant attention with a Rp 335 trillion budget. This program targets more than 82 million beneficiaries, ranging from elementary school students to pregnant women. The Finance Minister called the program a long-term investment to reduce the stunting rate and improve the quality of public health.

The defense sector is not immune to budget increases. The government allocates around Rp 335 trillion for the modernization of main weapon systems and the enhancement of TNI personnel capacity. This step is considered important for maintaining regional stability and for strengthening Indonesia's position in the Asia-Pacific geopolitical arena.

Macro Assumptions and Fiscal Risks

The 2026 State Budget posture is prepared based on certain macro assumptions, including an inflation rate of 2.5 percent, an exchange rate of Rp 16,500 per US dollar, and Indonesia's crude oil price (ICP) of $70 per barrel. The government has also set an oil lifting target of 610 thousand barrels per day and a gas lifting target of 984 thousand barrels of oil equivalent per day.

However, a number of economists view that assumption as posing challenges. Global pressure on energy prices and potential turmoil in the financial markets can affect the stability of the national budget. A deficit of Rp 689.1 trillion still requires sound financing, especially through the issuance of government securities.

From the market side, investors view the 2026 APBN as fairly realistic, but the government needs to maintain consistency so that the deficit does not widen amid global conditions of uncertainty. Indonesia's fiscal strength remains dependent on tax revenue, which must be increased through base broadening and improvements in compliance.

Impact on the business world

The business community sees opportunities from massive government spending. Education programs, infrastructure, and food security are predicted to drive demand in the construction, logistics, and local raw materials supply sectors. The Free Nutritious Meals Program opens a new market for food producers, distributors, and MSMEs that meet quality standards.

The exchange rate and interest rate assumptions set in the national budget also serve as a reference for the business world in formulating strategies. Importers of raw materials need to prepare hedging measures to avoid being squeezed by exchange rate fluctuations. Meanwhile, the export sector is encouraged to take advantage of fiscal policy stability by expanding markets overseas.

The government emphasizes that the success of the 2026 national budget will depend greatly on the collaboration of all parties. Fiscal policy must be accompanied by structural reforms, bureaucratic reform, and efforts to maintain political stability and security.

The House of Representatives' decision to approve the 2026 state budget worth Rp 3.842 trillion marks a milestone in the direction of national development. Significant spending on education, health, and defense demonstrates the government's commitment to strengthening the foundations of the nation. However, the dynamic global challenges still require vigilance and adaptive policy.