JurnalPost.com - The ratification of the 2027 State Revenue and Expenditure Budget (APBN) on September 29, 2026, brings both hope and challenges for the Indonesian economy. The government and the House of Representatives (DPR) have agreed on state revenue of Rp3,435.1 trillion, state expenditure of Rp4,106.3 trillion, and a deficit of Rp671.2 trillion, or approximately 2.4 percent of the Gross Domestic Product (GDP).
The government states that the 2027 fiscal policy remains expansive but is managed with caution or prudence. The economic growth target is set at 6 percent, reflecting optimism regarding the national economy's capacity for higher growth.
However, this optimism emerges amidst a global situation that is not yet fully stable. Fluctuating oil prices, pressure on the rupiah exchange rate, and geopolitical uncertainty are among the risks that must be accounted for.
In my view, the main issue with the 2027 APBN is not just the size of the budget provided by the government, but how effectively every rupiah is used to improve public welfare.
A large budget can indeed be a driver of economic growth. However, without proper management, fiscal expansion risks increasing the state's financial burden without producing meaningful change.
High Budget Absorption Does Not Guarantee Impact
One of the issues in public finance management is the tendency to judge the success of a program based on the level of budget absorption.
When a budget is almost entirely absorbed, a program is often considered to have been implemented well. In reality, expenditure realization does not always indicate success in achieving objectives.
In the concept of public finance, there is a distinction between inputs, outputs, and outcomes. Inputs describe the resources used, outputs show the direct results of an activity, while outcomes reflect the changes or benefits generated for the community.
For example, the success of the education budget cannot be judged solely by the number of schools renovated or educational assistance distributed. The government also needs to see whether these policies improve the quality of learning, expand access to education, and reduce regional disparities.
The same applies to social protection. The amount of assistance provided does not necessarily reflect success if that assistance is not well-targeted or fails to improve the economic conditions of the recipients.
The 2027 APBN allocates an education budget of Rp824 trillion, social protection of Rp539.7 trillion, and food security of Rp195.3 trillion.
The scale of these allocations demonstrates the government's priority on human development and strengthening the community's economy. However, the larger the budget used, the greater the demands for effectiveness and accountability in its implementation.
A commitment to strengthening performance measurement has actually begun to emerge. In the 2027 APBN discussions, the government stated that output and outcome measures for programs would be presented through first-semester budget implementation reports and the 2027 Central Government Financial Report (LKPP).
This step is to be appreciated. However, what is more important is ensuring that performance indicators are truly used as a basis for evaluation, rather than just as supplementary accountability documents.
Global Uncertainty and Risks to the APBN
Every APBN is prepared based on macroeconomic assumptions. The problem is that these assumptions can change along with developments in domestic and international economic conditions.
In the 2027 APBN, the government set a rupiah exchange rate assumption of Rp17,500 per US dollar. Meanwhile, in trading on September 29, 2026, the rupiah in the spot market closed at around Rp17,981 per US dollar.
This discrepancy highlights the pressure on the exchange rate that must be anticipated during budget implementation.
A weakening rupiah can increase import costs, including those for energy needs and industrial raw materials. Furthermore, changes in the exchange rate can also affect the government's obligations in foreign currencies.
Another risk stems from world oil prices.
The 2027 APBN uses an Indonesian Crude Price (ICP) assumption of 75 US dollars per barrel. Meanwhile, the ICP in August 2026 was recorded at 89.43 US dollars per barrel.
This difference shows the importance of the government's readiness to face the possibility of energy price increases that last longer than expected.
The Ministry of Finance has also explained fiscal sensitivity to rising oil prices. In calculations presented by the government, an increase in the ICP of 1 US dollar per barrel has the potential to widen the deficit by approximately Rp6.8 trillion, assuming other factors remain constant.
This calculation is a representation of budget sensitivity; it does not mean that every increase in oil prices automatically results in an additional deficit of the same amount.
In such conditions, the government faces difficult policy choices. Increasing the subsidy budget can help maintain public purchasing power, but it also has the potential to narrow the fiscal space for other development needs.
This is where the concept of opportunity cost becomes relevant. Every additional budget used to address rising energy costs has the consequence of reducing the space to fund other programs.
Therefore, fiscal risk management should not only focus on the accuracy of macroeconomic assumptions but also on budget flexibility and the government's ability to reprioritize spending when economic pressure increases.
A 6 Percent Growth Target: Realistic or Overly Ambitious?
The government is targeting economic growth of 6 percent in 2027. This target is higher than Indonesia's economic growth in the first semester of 2026, which was recorded at 5.45 percent.
This difference does indeed show the government's ambition to accelerate economic growth. However, in my opinion, a high target is not necessarily a problem as long as it is supported by realistic and measurable policies.
Economic growth cannot rely solely on increased government spending. It requires support from investment, labor productivity, public consumption, and a conducive business climate.
The APBN must also be able to encourage economic activities that generate long-term value-added.
In this context, the success of fiscal policy needs to be assessed through welfare indicators, not merely GDP growth figures.
The 2027 APBN sets several development targets, including a poverty rate of 6.0–6.5 percent, an open unemployment rate of 4.30–4.87 percent, a Gini ratio of 0.360–0.365, and a Human Capital Index of 0.575.
These indicators can serve as benchmarks to see to what extent the benefits of economic growth are truly felt by the community.
High economic growth is certainly an important achievement. However, that growth will lose some of its meaning if it is not accompanied by increased employment opportunities, poverty reduction, and equitable welfare.
Therefore, the quality of state spending needs to be placed as one of the main factors in achieving development targets.
The Quality of Regional Spending Must Not Be Ignored
The success of the APBN is also heavily influenced by the ability of regional governments to implement development programs.
Many public services directly felt by the community, such as education, health, and basic infrastructure, depend on budget implementation at the regional level.
In the 2027 APBN, the government has allocated Transfers to Regions of Rp735 trillion.
The government and the DPR have also agreed on a budget of Rp23 trillion to help finance the salaries of Government Employees with Work Agreements (PPPK) in the regions, especially educators and health workers.
In addition, there is an agreement to postpone the implementation of certain mandatory spending provisions in the Law on Financial Relations between the Central Government and Regional Governments (HKPD) to maintain fiscal space for regional governments.
This step shows attention to regional financial capacity. However, central government support must still be followed by improvements in the quality of regional budget planning and oversight.
In my view, regional fiscal issues cannot be solved solely by increasing transfer allocations. Regional governments also need to improve spending efficiency, strengthen revenue management capabilities, and ensure that development programs are designed based on community needs.
Without good coordination, central government programs risk not running optimally when implemented in the regions.
Promoting a Performance-Oriented APBN
In a performance-based budgeting approach, budget usage should pay attention to three main principles: efficiency, effectiveness, and allocation accuracy.
Efficiency means the government is able to produce outputs with reasonable resource usage. Effectiveness shows the extent to which a program succeeds in achieving its goals. Meanwhile, allocation accuracy emphasizes the importance of directing the budget to programs that provide the greatest benefits to the community.
These three principles become increasingly important when the government implements an expansive fiscal policy.
For me, there are at least three things that need attention in the implementation of the 2027 APBN.
First, strengthening program success indicators. Every priority program needs to have clear, measurable, and publicly accessible output and outcome targets. Thus, the public can assess the success of a program based on the benefits generated.
Second, increasing budget flexibility and evaluation. The government needs to prepare periodic evaluation mechanisms and priority adjustments when economic conditions change. This is important so that fiscal pressure does not immediately sacrifice programs that have long-term benefits.
Third, strengthening coordination between the central and regional governments. Synchronization of planning, implementation, and budget evaluation is necessary so that national fiscal policy truly has an impact down to the community level.
These three steps are not only related to budget savings but also to how the government obtains the greatest possible development benefits from the available fiscal resources.
Closing
The 2027 APBN reflects the government's optimism in driving economic growth and improving public welfare. An expansive fiscal policy is not something wrong, especially when the economy needs a push to grow higher.
However, optimism must go hand in hand with caution, accountability, and readiness to face changing global conditions.
The 6 percent economic growth target, increased priority spending allocations, and various development goals must be translated into policies that truly provide benefits.
In my opinion, the debate regarding the 2027 APBN should not stop at the question of whether the budget is too expansive or too optimistic.
A much more important question is whether the government can ensure that every rupiah spent produces real change in people's lives.
Because, in the end, the success of the APBN is not determined by how much money is spent, but by how much benefit is received by the community.
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