Prabowo Targets 6 Percent Growth in 2027: Is It Achievable?

August 15, 2026 | 02:11 pm

TEMPO.CO, Jakarta - The Prabowo government has set an economic growth target of 5.8 percent to 6 percent in the basic macroeconomic assumptions for the 2027 Draft State Budget (RAPBN).

Under the 2027 RAPBN, state spending is projected at Rp4,097.2 trillion, a 3.9 percent increase over the 2026 outlook. This total comprises central government expenditure of Rp3,362.2 trillion alongside regional transfers of Rp735.0 trillion. The fiscal deficit is projected at 2.40 percent of Gross Domestic Product (GDP).

President Prabowo Subianto stated that economic expansion in 2027 will be driven by a budget framework that remains expansive to stimulate national growth.

"Economic growth in 2027 is targeted at 6 percent, higher than the 2026 State Budget target of 5.4 percent," Prabowo declared while presenting the 2027 State Budget Bill and Financial Note at the House of Representatives (DPR) on Friday, August 14, 2026.

Meanwhile, state revenue under the 2027 Draft State Budget is projected to reach Rp3,426.0 trillion, marking a 6.8 percent increase from the 2026 outlook.

"The state revenue target will be met by plugging fiscal leakages and continuing to enhance operational spending efficiency across agencies," Prabowo stated.

To boost public welfare, the government is channeling fiscal resources toward empowering micro, small, and medium enterprises (MSMEs), village cooperatives, food self-sufficiency, and sustaining the Free Nutritious Meals (MBG) program, rather than relying on universal direct cash assistance.

Doubts over 6 Percent Ceiling 

Responding to the government's target, A. Akbar Susamto, Director of Macroeconomic Research for Fiscal and Monetary Policy at CORE Indonesia, argued that the 6 percent ceiling is overly ambitious given Indonesia's historical growth record.

"A target ceiling of 6 percent is too high and tends to be a political ambition rather than an objective projection," Akbar said during an online discussion hosted by CORE Indonesia reviewing the 2027 RAPBN Financial Note.

Akbar pointed out that historically, Indonesia's economic growth has rarely, if ever, surpassed 5.5 percent. Therefore, he emphasized that state budget formulation must be prepared based on empirical data and actual ground-level economic dynamics.

"State documents such as the State Budget must be prepared as realistically as possible based on empirical ground data so that the market does not doubt Indonesia's fiscal credibility," Akbar said.

Nevertheless, Akbar appreciated the government's commitment to maintaining the budget deficit below the 3 percent threshold of GDP.

Exchange Rate Pressures and Spending Risks

Meanwhile, CORE Indonesia economist Dipo Satria Ramli drew attention to the rupiah exchange rate assumption in the 2027 RAPBN, which is pegged at Rp16,000 to Rp17,500 per U.S. dollar.

Dipo noted that this assumption warrants scrutiny given that market conditions show the rupiah remains under pressure, frequently trading above Rp17,500 per US dollar.

He added that the government needs a concrete roadmap to help strengthen the rupiah back toward the budget assumption. He views this measure as crucial, particularly given the upcoming leadership transition at Bank Indonesia.

In addition to exchange rate risks, Dipo highlighted the proposed Rp4,097.2 trillion in state expenditure, calling it aggressively expansive. He cautioned that such fiscal expansion requires careful monitoring, noting it contrasts with OECD developed nations, which generally exercise greater fiscal restraint.

Read: Fact Check: Prabowo's Claim of 13-Year High Economic Growth

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