Indonesia Approves $231.5 Billion Budget for 2026 with Focus on Growth and Social Programs

Indonesia’s parliament has approved President Prabowo Subianto’s 2026 state budget, setting spending at 3,842.7 trillion rupiah ($231.5 billion) with a targeted fiscal deficit of 2.68% of GDP. The plan aims to accelerate economic growth, strengthen key industries, and expand social welfare initiatives.

The budget assumes economic growth of 5.4% in 2026, up from the 2025 target of 5.2%. Revenues are projected at 3,153.6 trillion rupiah, reflecting a 10% increase from the 2025 outlook. Spending is set 9% higher than estimated 2025 levels, while the deficit is forecast to fall below both the 2025 estimate of 2.78% and the 3% ceiling mandated by law.

Budget committee chair Said Abdullah described the plan as a turning point for Indonesia, highlighting its role in revitalizing national industries. Key sectors such as textiles, agriculture, and energy are expected to play a crucial role in meeting people’s basic needs and boosting industrial revival.

A major feature of the budget is the expansion of Prabowo’s flagship free meals program for students and pregnant women. Initially costed at 335 trillion rupiah for 2026, nearly double this year’s allocation, the scheme reflects the government’s push to improve nutrition and education outcomes nationwide.

Defense spending will also rise significantly, with a 37% increase bringing the allocation to 335.3 trillion rupiah. This reflects Prabowo’s commitment to strengthening national security alongside social development.

By combining industrial investment, social welfare expansion, and fiscal discipline, Indonesia’s 2026 budget underscores the government’s strategy to foster sustainable growth while keeping the deficit under control.