Regional Government Funds in Banks Hit Rp244 Trillion

Significant Increase in Idle Funds

As of September 30, 2025, regional governments in Indonesia have Rp244 trillion in idle funds deposited in banks, representing a substantial increase from Rp143 trillion recorded in January 2025. This 57% rise over nine months highlights the growing disparity between regional government revenue and expenditure patterns.

Factors Contributing to Increased Deposits

Vice Finance Minister Suahasil Nazara explained that the primary reason for this accumulation is the slow pace of regional government spending. The significant increase from Rp143 trillion in January to Rp158 trillion in February, and eventually to Rp244 trillion by September, indicates a consistent trend of underutilization of funds.

Implications for Regional Spending

The substantial deposits held by regional governments in banks suggest that there is considerable potential for increased regional expenditure in the coming months. As these funds are primarily derived from regional government revenues and allocations, their deployment could have significant implications for local economic activity and development projects.

Economic Context and Future Outlook

The accumulation of such large sums in bank deposits rather than being invested or spent in the local economy raises important questions about the efficiency of regional budget execution. As the year progresses, the utilization of these funds will be critical in determining the overall fiscal impact of regional governments on Indonesia's economic growth.