Executive Summary

Key insights and market outlook

The Indonesian Ministry of Public Works (PU) is facing challenges in budget absorption, with only 59.06% of its Rp 109.81 trillion budget utilized as of November 17, 2025 ¹

. Minister Dody Hanggodo attributed the low absorption to additional budget allocations for presidential instruction programs. Despite this, the ministry remains optimistic about reaching a 96.77% budget absorption by year-end ¹. The issue has drawn attention from both the DPR and the Ministry of Finance.

Full Analysis

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Deep Dive Analysis

Indonesia's Public Works Ministry Faces Budget Absorption Challenges

Budget Utilization Update

The Indonesian Ministry of Public Works (PU) has utilized only 59.06% of its Rp 109.81 trillion budget as of November 17, 2025, falling short of the target of 89.03% ¹

. Minister Dody Hanggodo reported that the physical progress reached 61.54% during the same period. The budget absorption issue has been a concern for both the DPR and the Ministry of Finance.

Reasons for Low Absorption

The low budget absorption was primarily attributed to the additional budget allocation for programs under Presidential Instructions (Inpres) in the second half of 2025 ¹

. This addition came from the unblocking of previously efficiency measures and capital expenditure approvals from the Ministry of Finance. The total budget was increased by Rp 23.21 trillion from the initial Rp 86.60 trillion to Rp 109.81 trillion ².

Allocation and Utilization

Part of the additional budget includes Rp 140 billion allocated for repairing facilities and buildings damaged during the mass demonstrations in late August 2025 ³

. The ministry has undertaken rehabilitation and repair works on at least 43 buildings across 15 cities in 6 provinces.

Government Oversight

The DPR has summoned Minister Dody Hanggodo to explain the low budget absorption. Chairman Lasarus of DPR's Commission V highlighted that some strategic projects under Inpres, such as Inpres No. 2/2025 on irrigation network development and Inpres No. 11/2025 on regional road connectivity, showed low physical progress at 29.33% and 15.78%, respectively ⁴

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Future Projections

Despite current challenges, Minister Dody expressed optimism about achieving a 96.77% budget absorption by the end of 2025 ¹

. The Ministry of Finance, led by Purbaya Yudhi Sadewa, is closely monitoring the situation and has warned of potential budget reallocation if absorption doesn't improve ⁴.

References