HOLOPIS.COM, JAKARTA – The Indonesian government has raised its projected budget deficit for 2026 to Rp734.4 trillion (2.85 percent of gross domestic product), citing lower tax revenue expectations while maintaining that the country’s fiscal position remains under control.
“The 2026 state budget will remain healthy and sustainable, with an efficient financing strategy and a deficit kept within a safe level of 2.85 percent of GDP to maintain fiscal credibility and support stronger economic growth,” Finance Minister Purbaya Yudhi Sadewa said, Holopis.com reported, Thursday (9/7).
The revised deficit projection is higher than the original target of Rp689.1 trillion, or 2.68 percent of GDP, approved in the 2026 state budget.
Although the deficit has widened, the government also increased its revenue forecast from Rp3,153.6 trillion to Rp3,208.1 trillion, largely due to higher-than-expected non-tax revenue and grants.
However, projected tax revenue was revised downward from Rp2,357.7 trillion to Rp2,310.8 trillion, while expected customs and excise revenue was lowered from Rp336 trillion to Rp320.6 trillion.
The reduction in tax revenue projections was one of the main factors behind the wider budget deficit. TaxDespite the revision, Purbaya said the government has no plans to raise tax rates or introduce new taxes.
Instead, he said revenue collection will be improved through tax administration reforms, including enhancements to the Coretax digital tax system, stronger compliance monitoring, and organizational reforms within the tax authority.
“I am confident that improvements in tax administration, the Coretax system, and tax procedures will enable us to achieve our revenue targets without raising tax rates or introducing new taxes,” he said.
By the end of the first half of 2026, Indonesia recorded a budget deficit of Rp196.5 trillion, equivalent to 0.76 percent of GDP, compared with Rp180.4 trillion, or 0.70 percent of GDP, at the end of May.
The government noted that the first-half deficit remained lower than the 0.84 percent of GDP recorded during the same period in 2025.
State revenue reached Rp1,459.4 trillion, or 46.3 percent of the annual target, representing a 21.4 percent increase from a year earlier.
Tax revenue totaled Rp1,187.8 trillion, while non-tax revenue reached Rp271 trillion.
Meanwhile, government spending reached Rp1,656 trillion, accounting for 43.1 percent of the annual budget allocation, while budget financing stood at Rp452 trillion, or 65.6 percent of the 2026 target.
Despite the higher deficit projection, the government said Indonesia’s fiscal position remains within the legal ceiling of 3 percent of GDP, which serves as the country’s statutory limit for the annual budget deficit.
Officials said ongoing tax reforms, improved spending quality, and sustained economic growth are expected to support fiscal stability through the end of 2026.
