JAKARTA - President Prabowo Subianto explained a number of macroeconomic assumptions in his speech delivering the Macro Economic Framework and Fiscal Policy Elements (KEM-PPKF) document for the 2027 Fiscal Year at the Plenary Session, Wednesday, May 20, 2026.
On this occasion, Prabowo said that he was specifically present to explain directly the direction of the government's economic and fiscal policies as the initial stage of the preparation of the Draft State Budget (RAPBN) 2027.
"I deliberately asked for time to stand in front of you to convey directly the direction of our country's economic and fiscal policies as a preliminary discussion in the preparation of the draft state budget (APBN) for 2027," he said.
Prabowo revealed that the government designed the 2027 State Budget with a deficit that remained under control, namely in the range of 1.8 percent to a maximum of 2.4 percent of gross domestic product (GDP).
"In terms of financing the deficit in 2027, we will keep the state budget deficit in the range of 1.80 to a maximum of 2.40 percent of GDP and we will continue to fight to reduce this deficit," he said.
In addition, the fiscal posture next year is also designed by considering the efficiency and productivity of state spending.
Government spending is estimated to be in the range of 13.62 percent - 14.8 percent of GDP, while state revenues are targeted at 11.82 percent - 12.40 percent of GDP.
In addition, the government targets the rupiah exchange rate to be at the level of Rp16,800 to Rp17,500 per US dollar (USD) in 2027.
Prabowo emphasized the importance of fiscal and monetary policy synergy to maintain rupiah stability in the midst of global economic dynamics.
The government also set a number of other macroeconomic assumptions, such as inflation in the range of 1.5 percent to 3.5 percent and the interest rate for the 10-year State Securities (SBN) at the level of 6.5 percent to 7.3 percent.
In the energy sector, the Indonesian crude oil price (ICP) is projected to be in the range of 70 US dollars to 95 US dollars per barrel.
Meanwhile, the target for lifting petroleum is set at 602 thousand-615 thousand barrels per day and gas lifting at 934 thousand-977 thousand barrels of oil equivalent per day.
Prabowo expressed optimism that through the right economic strategy and prudent and sustainable fiscal policies, the national economic growth could reach 5.8 percent - 6.5 percent in 2027, as a step towards the 8 percent economic growth target in 2029.
He also emphasized that this growth must have a direct impact on the improvement of people's welfare in a tangible way.
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