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

The Prabowo administration has proposed an economic growth target of 5.8 to 6 percent for 2027 in the 2027 Draft State Budget (RAPBN). This projection comes with a state spending total of Rp4,097.2 trillion, an increase of 3.9 percent from the 2026 projection. Central government spending is expected to be Rp3,362.2 trillion, supplemented by regional transfers of Rp735.0 trillion, resulting in a projected fiscal deficit of 2.40 percent of GDP.

President Prabowo Subianto announced the ambitious growth target at a presentation of the 2027 State Budget Bill and Financial Note to the House of Representatives (DPR) on August 14, 2026. He emphasized that the government's budgetary framework will be expansive to spur national growth, with an increase in economic expansion over the 2026 target of 5.4 percent.

According to the 2027 Draft State Budget, state revenue is expected to reach Rp3,426.0 trillion, a 6.8 percent rise from the 2026 outlook. The government aims to achieve this target by addressing fiscal leakages and increasing operational spending efficiency across agencies. Public welfare will be bolstered by allocating fiscal resources to support micro, small, and medium enterprises (MSMEs), village cooperatives, food self-sufficiency, and the Free Nutritious Meals (MBG) program, rather than through universal direct cash assistance.

However, Akbar Susamto, Director of Macroeconomic Research for Fiscal and Monetary Policy at CORE Indonesia, expressed skepticism about the 6 percent growth target, arguing that it is overly ambitious given Indonesia's historical economic growth record. He highlighted that Indonesia's economic growth has rarely exceeded 5.5 percent and stressed that state budget planning should be based on empirical data and actual economic dynamics.

Dipo Satria Ramli, an economist at CORE Indonesia, cautioned about the rupiah exchange rate assumption in the 2027 RAPBN, which is pegged at Rp16,000 to Rp17,500 per U.S. dollar. He noted that this assumption is problematic due to ongoing market pressures keeping the rupiah below the budgeted level. Dipo called for a concrete roadmap to strengthen the rupiah and expressed concern over the aggressive fiscal expansion proposed by the government, which he compared unfavourably to fiscal restraint observed in OECD developed nations.