Indonesia's 2025 Budget Realization Surges Amid Expanded Government Spending

Significant Budget Reallocation

The Indonesian government has made a significant adjustment to its 2025 budget allocation. The Ministry of Finance has unblocked Rp 206.4 trillion from the original Rp 306.7 trillion that was initially frozen due to efficiency measures ¹

. This decision was made to ensure the continuation of basic governmental operations and social assistance programs.

Surge in Government Expenditure

The realization of government spending, particularly through ministries and government agencies (K/L), has seen a substantial increase. By the end of December 2025, expenditures reached Rp 1,500.4 trillion, representing 129.3% of the initial APBN 2025 target of Rp 1,275.6 trillion ²

. This figure also marks a 14% year-on-year increase compared to the 2024 expenditure of Rp 1,315 trillion.

Cabinet Expansion Impact

The significant rise in government spending is directly attributed to the expansion of the cabinet under President Prabowo Subianto's administration. The number of ministries/agencies (K/L) increased from 34 at the beginning of the year to 48 with the new cabinet ²

. This expansion necessitated additional budget allocations for operational needs and personnel.

Rationale Behind Budget Adjustments

Wakil Menteri Keuangan Suahasil Nazara explained that the unblocking of the budget was necessary to maintain basic governmental operations and continue social assistance programs ¹

. The additional funds were crucial for supporting the expanded government structure and ensuring the continuity of essential services.

Implications for Fiscal Management

The significant increase in government expenditure and the adjustment of budget allocations highlight the challenges in managing fiscal policy amid changing governmental structures. The surge in spending could have implications for Indonesia's fiscal deficit and overall economic management in the coming years.