Indonesia’s Budget Faces February Deficit of Rp 135.7 Trillion
Jakarta – Indonesia’s budget recorded a deficit of Rp 135.7 trillion (approximately $8.6 billion USD) as of the end of February 2026, according to recent government data. This figure represents 0.53% of the country’s Gross Domestic Product (GDP), signaling a period of increased government spending relative to revenue collection. The announcement, made by Minister of Finance Purbaya Yudhi Sadewa on Friday, March 6, 2026, underscores the ongoing challenges in balancing economic growth with fiscal responsibility in Southeast Asia’s largest economy.
The deficit emerged as government expenditure outpaced income, with total state revenue reaching Rp 358 trillion although state spending amounted to Rp 493.8 trillion during the period up to February 28, 2026. Despite the deficit, Minister Sadewa expressed confidence in the government’s ability to manage the situation, citing a 30% increase in tax collection during the first two months of the year. “We will ensure that this stability continues going forward,” he stated during a press conference at the Ministry of Finance in Jakarta.
Revenue Breakdown and Tax Performance
A detailed breakdown of the revenue figures reveals that tax revenue contributed Rp 245.1 trillion to the total, while customs and excise duties brought in Rp 44.9 trillion. Non-tax state revenue (PNBP) accounted for Rp 68 trillion. The significant 30% growth in tax collection is a positive indicator, suggesting improved macroeconomic conditions and enhanced efficiency in tax collection efforts by the Directorate General of Taxes (DJP). This growth builds on positive trends observed earlier in the year, with a 20.5% increase in overall state revenue reported in January 2026, as noted in previous reports. The Ministry of Finance’s performance report highlights the importance of sustained tax revenue growth for maintaining fiscal stability.
Expenditure Analysis: Central Government and Regional Transfers
On the expenditure side, the central government accounted for Rp 346.1 trillion of the total spending, while transfers to regional governments reached Rp 147.7 trillion. This allocation reflects the government’s commitment to supporting regional development and addressing local needs. The overall expenditure increase of 25.7% year-on-year indicates a continued focus on infrastructure projects, social programs and other key areas of investment. Understanding the allocation of these funds is crucial for assessing the effectiveness of government policies and their impact on economic growth.
Contextualizing the Deficit within Indonesia’s Economic Landscape
Indonesia’s economic performance has been a key factor influencing its fiscal position. The country has experienced steady economic growth in recent years, driven by domestic consumption, investment, and exports. Although, global economic headwinds, including fluctuating commodity prices and geopolitical uncertainties, pose risks to the country’s economic outlook. The current budget deficit, while manageable, requires careful monitoring and proactive policy measures to ensure long-term fiscal sustainability. IQPlus News reported in February that the deficit remained “within the corridor” of the 2026 budget design.
Shifting Revenue Streams and the Role of State-Owned Enterprises
A notable shift in Indonesia’s revenue streams has been the transfer of dividend payments from State-Owned Enterprises (SOEs) to the Indonesia Investment Authority (Danantara). This change, designed to enhance investment and economic development, has impacted the composition of non-tax state revenue (PNBP). While the PNBP experienced a correction of 20.4%, Minister Sadewa emphasized that this reflects a recovery beyond non-recurring components from the previous year. This restructuring aims to optimize the leverage of state assets and attract foreign investment, contributing to long-term economic growth.
Implications for Indonesia’s Economic Policy
The February budget deficit has implications for Indonesia’s broader economic policy. The government will likely prioritize measures to boost revenue collection, control spending, and attract investment. Potential strategies include strengthening tax administration, promoting exports, and fostering a more favorable business environment. Maintaining fiscal discipline is essential for preserving investor confidence and ensuring the long-term stability of the Indonesian economy. The government’s ability to navigate these challenges will be crucial for achieving its economic growth targets and improving the living standards of its citizens.
Looking Ahead: Monitoring and Future Updates
The Ministry of Finance is expected to provide further updates on the APBN performance in the coming months. Key indicators to watch include tax revenue growth, government spending patterns, and the overall economic outlook. Regular monitoring of these factors will be essential for assessing the effectiveness of government policies and making necessary adjustments to ensure fiscal sustainability. The next scheduled update is anticipated in April 2026, following the release of the March fiscal data.
As Indonesia continues to navigate a complex global economic landscape, maintaining a balanced budget and promoting sustainable economic growth will remain top priorities for the government. The current deficit, while manageable, serves as a reminder of the ongoing challenges and the need for prudent fiscal management.
(Image: Instagram post from idx_channel featuring Minister of Finance Purbaya Yudhi Sadewa discussing the APBN.)
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