- The government proposes a more moderate fiscal deficit of 2.40% of GDP for FY2027, while its bullish growth outlook reflects confidence in its ability to optimise public spending.
- Stronger revenue growth underpins the lower deficit target, while further mobilisation of off-budget resources may help contain on-budget expenditure.
- Limited incentives to rein in government financing capacity could add to fiscal risks, highlighting Bank Indonesia’s role in containing the government’s interest burden.
