Jakarta, Indonesia Sentinel — Indonesia’s government has recently approved a state budget (APBN) for 2025 amounting to $232 billion (IDR 3,621.3 trillion). This budget, however, presents a significant challenge, as it falls $20 billion short of the estimated $250 billion (IDR 3,905.38 trillion) necessary to achieve the ambitious economic growth target of 5.89% set by President-elect Prabowo Subianto.
Drajad Hari Wibowo, Deputy Chairman of the expert team for Prabowo, emphasized the need for an extensive budget to meet these growth goals, which aim for an 8% increase in economic output by 2029. This long-term vision will require a substantial rise in state spending, projected to reach $386 billion (IDR 6,096.88 trillion) by 2029.
To address this financial gap, Prabowo’s administration is planning to establish a National Revenue Agency, designed to reform Indonesia’s tax system.
Drajad highlighted that the agency would focus on tapping into previously uncollected revenues rather than simply raising existing tax rates, a strategy aimed at avoiding any hindrance to economic growth.
The approved budget for 2025 allocates $173 billion (IDR 2,701 trillion) for central government spending and $59 billion (IDR 919 trillion) for regional transfers. Below are the key components of the 2025 budget:
- Central Government Spending: IDR 2,701 trillion
- Ministry/Agency Expenditures: IDR 1,160 trillion
- Non-Ministry/Agency Expenditures: IDR 1,541 trillion
- Debt Management Programs: IDR 552 trillion
- Grant Management Programs: IDR 202 billion
- Subsidy Management Programs: IDR 307 trillion
- Other Expenditure Management Programs: IDR 491 trillion
- Special Transaction Management Programs: IDR 189 trillion
- Regional Transfers: IDR 919 trillion
- General Allocation Fund: IDR 446 trillion
- Special Allocation Fund: IDR 185 trillion
- Village Fund: IDR 71 trillion
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Ultimately, the success of Prabowo’s economic agenda hinges on implementing effective revenue reforms that are essential for bridging the budget gap and ensuring sustainable growth for Indonesia in the coming years.
(Ray)
