Subsidy and Compensation Expenditure Reaches Rp233 Trillion in Semester I-2026

JAKARTA - The government has realized the subsidy and compensation spending to state-owned enterprises (SOEs) of Rp. 233 trillion until Semester I 2026. This figure is equivalent to 52.1 percent of the APBN ceiling and increased by 44.4 percent compared to the same period last year (year on year/yoy).

Minister of Finance Purbaya Yudhi Sadewa said the increase in subsidy and compensation spending was carried out as a government measure to maintain people's purchasing power amid high volatility in global energy prices.

Of the total realization, subsidies were recorded at Rp116 trillion, while compensation reached Rp116.9 trillion.

"Subsidies and compensation up to the first semester of 2026 have been realized at Rp. 233 trillion or 52.1 percent of the state budget ceiling to maintain people's purchasing power," he said in a working meeting with the Budget Agency (Banggar) of the House of Representatives of the Republic of Indonesia, Tuesday, July 7.

Purbaya explained that the realization of subsidies and compensation in the first half of this year increased significantly compared to Semester I 2025 which amounted to Rp. 161.4 trillion.

According to him, the increase was influenced by the movement of the Indonesian Crude Price (ICP), the fluctuation of the rupiah exchange rate, and the increase in subsidized fuel consumption, 3 kilogram LPG, and subsidized electricity. Meanwhile, in the non-energy sector, the increase in subsidy spending mainly came from increased fertilizer subsidy payments.

The government also noted an increase in the volume of distribution of various subsidized commodities compared to the same period last year, namely the distribution of subsidized fuel increased by 7.8 percent, the distribution of 3 kilogram LPG increased by 2 percent, the number of subsidized electricity customers increased by 2.1 percent, while the distribution of subsidized fertilizer jumped 21.4 percent.

According to him, the increase in subsidy and compensation spending is one of the fiscal instruments to maintain price stability, maintain people's purchasing power, and mitigate the impact of energy and food price fluctuations on the national economy.

Overall, the realization of state expenditures until Semester I 2026 reached Rp1,656 trillion or 43.1 percent of the state budget ceiling of Rp3,842.7 trillion. This figure grew 17.8 percent compared to the same period last year.

Purbaya said that the acceleration of the absorption of the budget was carried out so that the fiscal stimulus could have a more even impact on the economy throughout the year while supporting the implementation of various government priority programs.

"If we look at last year's state spending in the same direction, it only grew by 38.8 percent, now the absorption is 43.1 percent. This is the result of our efforts to ensure that state spending is more evenly distributed throughout the year," he said.

He detailed that the realization of central government spending reached Rp1,298.6 trillion or 41.2 percent of the state budget ceiling, an increase of 29.4 percent compared to Semester I 2025 which was Rp1,003.6 trillion.

Meanwhile, the distribution of Transfer to the Region (TKD) has reached Rp397.4 trillion or 51.6 percent of the APBN ceiling.

The ministry/institution (K/L) spending has been realized at Rp658.9 trillion which is used to support various priority programs, including the Free Nutritious Meal (MBG) Program, social assistance distribution such as health insurance premiums for the poor, Sembako Cards, the Family Hope Program (PKH), and the Smart Indonesian Card (KIP) Kuliah.

In addition, the budget is also used to pay the salaries of state civil servants (ASN), including Christmas allowances (THR) and the 13th salary.

On the other hand, the realization of non-ministerial/institutional spending reached IDR 639.7 trillion which was used to pay for energy subsidies and compensation for the current year until Semester I 2026, as well as to complete the shortfall in subsidy and compensation payments in 2025.