JAKARTA, thekabarnews.com—Indonesia recorded a state budget deficit of Rp319 trillion (US$19.2 billion), equivalent to 1.24 percent of gross domestic product (GDP), through September 2026 as the government increased spending to support public services and protect households from global economic pressures.

The Finance Ministry reported on Friday, October 9, that state revenue reached Rp2,341.5 trillion, or 74.2 percent of the annual target. Revenue grew 25.5 percent from the same period last year, supported by stronger tax receipts and non-tax state revenue.

State spending, meanwhile, reached Rp2,660.5 trillion, representing 69.2 percent of the 2026 budget allocation. The fiscal position also recorded a primary balance surplus of Rp125.5 trillion.

“This remains on track. We are implementing a state budget that was designed from the outset to run a deficit,” Finance Minister Suahasil Nazara said.

“Last month, the deficit was 0.9 percent. As of the end of September, it stood at 1.2 percent.”

The government has positioned the state budget (APBN) as a buffer against fluctuations in oil prices and global interest rates. It also uses public spending to protect purchasing power and maintain essential services.

Subsidy and compensation spending reached Rp376.8 trillion by the end of September, an increase of 54.1 percent year-on-year. The funds helped cover subsidized fuel and three-kilogram liquefied petroleum gas cylinders. They also supported electricity assistance for 43.4 million customers.

Social assistance spending reached Rp115.8 trillion, or 71.2 percent of the annual allocation. This included Rp34.7 trillion in state-funded health insurance contributions for 96.7 million people. The government also disbursed Rp28.2 trillion through the staple-food assistance program for 17.6 million beneficiary families.

Public investment continued alongside the protection programs. Capital expenditure rose 16.7 percent from a year earlier to Rp202 trillion, according to the ministry’s September budget report. Health expenditure reached Rp161.8 trillion, while education spending amounted to Rp574.2 trillion.

Several indicators supported the government’s assessment that economic activity remained resilient. Indonesia’s manufacturing purchasing managers’ index rose to 52.4 in September from 49.8 in August. A reading above 50 indicates expansion. Annual inflation stood at 3.28 percent, within Bank Indonesia’s 2026 target range of 1.5 to 3.5 percent.

The Finance Ministry said fiscal policy would work alongside monetary measures and investments managed by Danantara Indonesia. Suahasil said the state budget would concentrate on public services, while Danantara would support investment and expand the economy’s productive capacity.

However, rising oil prices and uncertain global interest rates could increase subsidy costs and pressure the rupiah. Maintaining well-targeted spending and steady revenue collection will therefore remain central to preserving Indonesia’s fiscal resilience through the end of 2026.