No more cuts to regional transfer funds in 2026 budget, Minister says

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa said there will be no further cuts to regional transfer funds (TKD) in the drafting of the 2026 state budget bill (RAPBN).

Regarding the possibility of additional transfers, Purbaya noted that the government still needs to hold discussions with the House of Representatives (DPR).

“We will not make any more cuts,” he said in response to a question on regional transfers during a press conference at the Presidential Palace on Wednesday evening.

During the briefing, Purbaya underlined that the government’s policy on regional transfers is essentially aimed at supporting economic growth.

“We will be inclined to pursue fiscal policies that encourage economic growth,” he said.

He added that the government will focus on better budget absorption and stronger management of budget use. “The key is improving budget absorption so it does not disrupt the conditions and limitations of our financial system,” he added.

Earlier on Wednesday morning, Purbaya met President Prabowo at the Presidential Palace to report on the outcome of his first working meeting with Commission XI of the DPR at the Parliament Complex in Jakarta.

They also discussed the progress of the 2026 state budget bill. “The figures are still under discussion, so no decisions have been made. But we reported the progress so far,” Purbaya said.

The minister also conveyed the government’s proposals regarding possible adjustments to several budget items in the 2026 state budget bill.

“There may be budget changes, but I cannot disclose them yet as discussions with the DPR are still ongoing,” he added.

At the DPR meeting earlier in the day, Purbaya and Commission XI reviewed the 2026 budget work plan of the Finance Ministry, valued at Rp52.16 trillion.

In his presentation, Purbaya said Indonesia’s gross domestic product (GDP) growth target in the 2026 draft state budget is set at 5.4 percent, higher than the 5.2 percent target in the 2025 budget.

By component, investment growth is projected to slow from 5.5 percent this year to 5.2 percent next year.

Meanwhile, household consumption is expected to rise from 5.0 percent to 5.2 percent, and exports from 5.4 percent to 6.7 percent.

By sector, agriculture is expected to grow 4.1 percent, manufacturing 5.2 percent, and information and communication 8.0 percent in 2026.