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🇮🇩 Indonesia /Economy & Trade

Indonesia on Track for 8-9% Growth Amidst Heavy State Spending, Officials Say

From Tempo · () Indonesian

Translated from Indonesian and summarized by DistantNews. Read the original for the full story.

At a glance

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  • Indonesia's economic growth is on track to reach 8-9% due to substantial state project spending, according to National Economic Council Chairperson Luhut Binsar Pandjaitan.
  • Daily government spending on state projects, including the Free Nutritious Meal (MBG) program, amounts to approximately Rp1 trillion, aimed at stimulating grassroots economic expansion.
  • Despite the costs, officials are confident in maintaining the State Budget deficit below 3% and highlight Indonesia's resilient economy and adaptive fiscal management.

Indonesia is poised to achieve its ambitious economic growth targets of 8 to 9 percent, driven by significant state project expenditures, National Economic Council Chairperson Luhut Binsar Pandjaitan stated Monday. He emphasized that daily government spending, channeling up to Rp1 trillion from the central government to the grassroots, is a key catalyst for this expansion.

So, over time, through deregulation, efficiency, and curbing corruption, that 8-9 percent growth will be achieved

· Luhut Binsar PandjaitanNational Economic Council Chairperson Luhut Binsar Pandjaitan expressing confidence in Indonesia's economic growth prospects.

"Over time, through deregulation, efficiency, and curbing corruption, that 8-9 percent growth will be achieved," Pandjaitan said. These substantial daily expenditures include the government's priority Free Nutritious Meal (MBG) program, which continues to face public scrutiny. However, Pandjaitan views these initiatives as crucial for economic development, citing the 5.61 percent growth recorded in the first quarter of 2026.

Despite the financial outlay for programs like MBG, government officials remain confident in fiscal stability. Deputy Finance Minister Suahasil Nazara affirmed that the State Budget (APBN) deficit will be capped below 3 percent this year, a continuation of the trend from 2025's 2.92 percent deficit. Nazara highlighted Indonesia's adaptive and flexible APBN management as a strong proposition for investors.

The reality is that Indonesia offers a strong proposition through its adaptive and flexible management of the APBN

· Suahasil NazaraDeputy Finance Minister Suahasil Nazara affirming the government's fiscal credibility.

Beyond the MBG program, the state budget is also funding other key initiatives such as the Red and White Cooperative, model schools, and healthcare infrastructure. These allocations are coordinated with investment partners to support major state projects. Pandjaitan reiterated confidence in reaching the 8 percent growth mark, aligning with President Prabowo's administration goals, and noted Indonesia's economic resilience compared to other nations.

We are confident that growth will be achieved the 8 percent mark, in line with President Prabowo's target for his administration

· Luhut Binsar PandjaitanLuhut Binsar Pandjaitan reiterating confidence in meeting the administration's economic growth targets.
About this summary

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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