Indonesia reallocates nearly Rp200 trillion to meet spending needs

Indonesia has shifted nearly Rp200 trillion in budget allocations as unexpected demands push up government expenditure, Finance Minister Suahasil Nazara told KADIN’s national leadership meeting in Jakarta on 30 October 2026. The spending outlook for 2026 now stands at Rp3,942 trillion, compared with an initial allocation of Rp3,843 trillion.

At the meeting at Hotel Borobudur, Suahasil linked the spending pressures to political upheaval and disasters that the government had not anticipated. He said at least around Rp60 trillion in extra budget funds had already been disbursed to deal with disasters. Forest and land fires were among the emergencies requiring a response.

External pressures had also raised the government's bill for energy subsidies and compensation, including fuel support, he said. By the end of September 2026, subsidy and compensation spending totalled Rp376.8 trillion, or 84.3 per cent of its budget allocation, exceeding the amount recorded in the corresponding period a year earlier.

Suahasil urged more precise targeting of subsidies. However, he said budget support was still needed over the short term to hold down energy prices and keep economic activity going.

The revenue forecast for 2026 has also moved up, to Rp3,208 trillion from Rp3,154 trillion, while the planned deficit is now 2.85 per cent rather than 2.68 per cent. Suahasil said the government must meet higher expenditure through additional revenue, changes to existing allocations, or both.