Regional Budget Spending Slows as Fiscal Management Faces Challenges

Slow Expenditure Realization

The realization of regional budget (APBD) spending in Indonesia is facing significant challenges as the year 2025 comes to a close. As of mid-December 2025, regional expenditure has only reached 70.81% of the total allocation, while regional revenue has been more successful, reaching 82.93% during the same period. This discrepancy highlights the growing concern over the effectiveness of regional fiscal management.

Expert Analysis

Banjaran Surya Indrastomo, Chief Economist at Bank Syariah Indonesia (BSI), provides valuable insights into this issue. According to Banjaran, the slow realization of regional expenditure is primarily due to ineffective regional fiscal management rather than a lack of available funds. This assessment is supported by data from APBN Kita Edisi Desember 2025, which shows that the central government's transfer to regions (TKD) has been realized at 91.5% of the total allocation by November 30, 2025.

Fund Availability Not the Primary Issue

The high realization rate of TKD indicates that the problem does not lie in the availability of funds but rather in the capacity of regional governments to execute their budgets effectively. Banjaran emphasized that the significant difference between revenue collection and expenditure realization suggests underlying issues in budget management at the regional level.

Implications for Regional Development

The slow spending of APBD funds can have significant implications for regional development projects and overall economic growth. As the year ends, there are concerns that delayed spending could impact the execution of critical infrastructure and public service projects, potentially affecting the quality of life for citizens and the broader economic landscape.