Prabowo Targets 0 Percent State Budget Deficit, Indef Calls Irrealistic

Director of Big Data Institute for Development of Economics and Finance (INDEF) Development, Eko Listyanto. (ANTARA)

JAKARTA - Director of Big Data Institute for Development of Economics and Finance (Indef) Development, Eko Listyanto highlighted the target of narrowing the deficit in the state budget (APBN) to 0 percent by 2027 to 2028. He said the target was unrealistic.

For your information, President Prabowo Subianto has set a target of narrowing the state budget deficit to 0 percent in the next 2 to 3 years, from 2.48 percent of gross domestic product (GDP) in 2026.

"Realistic, isn't it actually a 0 percent deficit? This actually depends on what the state budget wants to be used for? When the function is still 3 yes, stabilization, distribution, and allocation, I think even in the next 3 years it will still be difficult. This is not a pessimistic tone, but this is actually the most realistic thing that is difficult, "he said in a virtual discussion, Sunday, August 17.

Furthermore, Eko saw that the state budget deficit in the Prabowo Subianto administration actually widened.

"The fact is that in the Prabowo era, the deficit was a wide trend. So in the past, since the era of Pak Jokowi, especially in the second period, seeing that the deficit numbers above 2 percent were like normal. In fact, it has implications for the confidence market in SBN," he said.

Based on data, the state budget deficit in 2024, which is Prabowo's first year as President, is 2.29 percent of GDP. This figure is an increase from the 2023 State Budget deficit which is 2.27 percent.

In the 2025 State Budget Law (UU), the government has set a state budget deficit of 2.53 percent of GDP or IDR 616.2 trillion. However, the Ministry of Finance (Kemenkeu) predicts that the realization of this year's APBN deficit will actually exceed the target, reaching 2.78 percent or IDR 662 trillion.

"Say next year the deficit target is 2.48 percent, yes, the target. Realization can be more like that. Because today we set 2.3, the outlook can be up to 2.7 percent," he said.

According to Indef's records, continued Eko, next year the government will have to pay debts due to approximately IDR 1,400 trillion.

"The problem is, next year the debt will increase, the payment, almost Rp1,400 trillion, this is a huge amount of debt due. Indeed, this is the accumulation of previous government policies. But what happened is still our deficit is widening," he said.

Eko said that if the government no longer proposes debt to finance the state budget in order to pursue the target of narrowing the deficit, there will be many government functions that will not run.

"If you want to reduce it to zero percent, you can actually do it, but surely there will be many government functions that don't work," he explained.

On the other hand, President Prabowo said that state-owned assets managed by the Investment Management Agency (BPI) Daya Anagata Nusantara (DANTara) could save the state budget from the deficit. However, Eko assessed that Danantara could not be relied on for this goal.

"Without any sustainable state revenue, apart from the current one, it will be difficult for me to feel. And if it only relies on the Danantara, it's difficult," said Eko.

Eko said that as an investment manager and manager of endowment funds or sovereign wealth fund (SWF), Danantara takes a long time to profit from managed assets.

Dantara itu adalah SWF. SWF itu enggak bisa ditarik hasilnya cepat-cepat. Jadi kalau mau segera ditarik cepat-cepat, ya takumnya malah itu malah sama saja, belum layuh sudah dikan," katanya.