Executive Summary

Key insights and market outlook

Indonesia's budget deficit reached Rp 479.7 trillion (2.02% of GDP) by October 31, 2025, as government revenue fell short of expenditure. The Ministry of Finance reported that state revenue stood at Rp 2,113.3 trillion (73.7% of target), while expenditure reached Rp 2,593 trillion (73.5% of target). Economists warn that achieving the government's ambitious spending target in the remaining two months will be challenging due to planning constraints and economic pressures.

Full Analysis

02

Deep Dive Analysis

Indonesia Faces Challenges in Meeting Year-End Budget Targets

Widening Deficit and Revenue Shortfall

Indonesia's budget deficit has widened to Rp 479.7 trillion by the end of October 2025, representing 2.02% of GDP ²

. This situation arises from a significant gap between government revenue and expenditure. As of October 31, 2025, state revenue reached Rp 2,113.3 trillion, or 73.7% of the targeted outlook. The revenue comprises Rp 1,459 trillion from taxes, Rp 249.3 trillion from customs and excise, and Rp 402.4 trillion from non-tax revenue ².

Expenditure Realization and Challenges Ahead

On the expenditure side, the government has spent Rp 2,593 trillion, or 73.5% of the projected outlook by the same date ²

. Economists express concerns that achieving the remaining spending target of Rp 783.8 trillion in just two months will be particularly challenging ¹. The Ministry of Finance has indicated that it will not reallocate budgets from underperforming ministries and agencies, instead pushing them to accelerate their spending ¹.

Economic Implications and Government Strategy

The current budget execution dynamics reflect both the government's fiscal challenges and its commitment to maintaining spending targets. While the deficit remains within the considered safe limit according to the Ministry of Finance, the pressure to accelerate spending in the final months of the year could impact budget absorption quality ¹

².

References