Indonesia’s fiscal condition in 2025 is sending serious warning signals. Amid economic growth of 5.11%, tax revenues contracted by 0.62% (yoy), causing tax buoyancy to fall to -0.12. This means that for every 1% increase in economic growth, tax revenue declines by 0.12%. The situation has deteriorated compared to 2024, when tax buoyancy stood at 0.71, indicating a weakening ability of the tax system to respond to economic expansion.
Economist Permana Agung Dradjattun views this trend as reflecting structural issues, evidenced by weakening tax ratio and tax buoyancy despite rising GDP, alongside increasing deficit and debt ratios. Although the fiscal deficit remains below 3% of GDP, its trajectory signals mounting fiscal pressure that requires prompt response through strengthening the tax base and improving the quality of economic growth.
– Kontan, February 11, 2026
Indonesia’s Debt Service Ratio (DSR) Projected to Surge to 46% in 2026
Indonesia’s Debt Service Ratio (DSR) is projected to reach 46% in 2026, significantly above the ideal threshold of 25–30%. Economists warn that this level erodes the effectiveness of the state budget (APBN) and could heighten investor risk perception toward government bonds (SBN), keeping borrowing costs elevated and increasing debt servicing burdens.
With outstanding debt at Rp 9,408.64 trillion (40.30% of GDP as of September 2025), the government is urged to strengthen tax revenues through both extensification and intensification measures, including carbon tax implementation, while adopting more prudent debt management to better control the maturity profile and preserve fiscal sustainability.
– Kontan, February 11, 2026
Shrinking Middle Class Pressures the Tax Base
Mandiri Institute reports that Indonesia’s middle class declined from 47.9 million people (2024) to 46.7 million (2025). INDEF warns that this trend could suppress tax revenues, as household consumption and formal employment constitute the backbone of VAT and personal income tax (Article 21).
The impact manifests as silent tax erosion: nominal revenues may still increase, but at a slower pace due to weakening consumption and the expansion of the informal sector. The solution lies not in raising tax rates, but in broadening the tax base and accelerating formal job creation.
– Kontan, February 9, 2026
Consumer Confidence Rises, but Households Increase Savings
Bank Indonesia’s Consumer Survey shows the Consumer Confidence Index (CCI) rising to 127.0 in January 2026 from 123.5, remaining firmly in optimistic territory. The increase is supported by improved perceptions of income, job prospects, and six-month economic expectations, signaling resilient domestic demand.
However, the share of consumption declined to 72.3% (from 74.3%), while savings rose to 16.5% (from 14.9%), indicating continued household caution. Going forward, the CCI will be influenced by inflation, labor market conditions, interest rates, and global sentiment.
– Kontan, February 9, 2026
Parliament Prepares Omnibus Law on State Finance
Commission XI of the House of Representatives (DPR RI) has included the State Finance Bill in the 2026 Priority National Legislative Program (Prolegnas) under an omnibus law approach, following major changes in SOE governance after the enactment of the new SOE Law.
A key change involves the transfer of the Minister of Finance’s role as SOE shareholder to BPI Danantara, including dividend management, which will no longer be recorded as Non-Tax State Revenue (PNBP) but reinvested instead. This shift necessitates a comprehensive restructuring of the state finance legal framework—including the State Finance Law, State Treasury Law, and State Assets Law—due to its direct implications for the APBN structure and the function of the State General Treasurer. The omnibus law approach is considered the most appropriate mechanism for regulatory harmonization.
– Kontan, February 11, 2026
Ministry of Energy Continues Technical Review of Martabe Gold Mine Operations
The Ministry of Energy and Mineral Resources (ESDM), through the Directorate General of Minerals and Coal (Minerba), is conducting a technical review regarding the continuation of operations at the Martabe gold mine owned by PT Agincourt Resources (a subsidiary of UNTR). The review includes evaluation of alleged violations reported by the PKH Task Force.
Director General Tri Winarno emphasized that no final decision has been made and discussions are ongoing, taking into account the Contract of Work (CoW) framework, which places the government and the company on equal legal footing.
– Kontan, February 14, 2026
ESDM Targets 75 Million Tons of Coal DMO in 2026
The Ministry of Energy and Mineral Resources aims to secure 75 million tons of coal under the Domestic Market Obligation (DMO) scheme in 2026. The primary supply will come from first-generation PKP2B holders and SOEs.
According to the Director General of Minerba, these groups contribute more significantly as they face no RKAB reductions and are subject to a 19% royalty plus an additional 10% net profit contribution to the state. The scheme is intended to safeguard domestic supply, particularly for strategic needs such as national electricity generation.
The government also confirmed that the DMO coal price for PT PLN (Persero) will remain at US$70 per ton. A 30% DMO allocation applies to first-generation PKP2B holders and SOEs as a priority for national electricity needs, while other mining companies will contribute gradually under existing approvals.
– Kontan, February 14, 2026
Rp 58 Trillion Allocated in 2026 State Budget for 3 Million Housing Program
The government has allocated Rp 58 trillion in the 2026 State Budget (APBN) to support the 3 million housing program through the Ministry of Housing and Settlement Areas (PKP). The budget focuses on the FLPP scheme, BSPS, VAT borne by the government (PPN DTP) for commercial housing, and the Housing Program Credit (KPP), targeting approximately 790,000 housing units.
The BSPS program is scheduled to commence in late March 2026 to ensure timely benefits for the public.
– Kontan, February 12, 2026
Prabowo Reaffirms “Indonesia Incorporated” Strategy to Strengthen National Competitiveness
President Prabowo Subianto reaffirmed the “Indonesia Incorporated” strategy as a pillar of national development at the Indonesia Economic Outlook 2026 forum. The strategy emphasizes cross-scale collaboration among large, medium, and small enterprises to reinforce one another and drive national self-reliance (berdikari).
The government, private sector, and all national stakeholders are expected to work collectively to accelerate growth and enhance public welfare.
At the same forum, Coordinating Minister Airlangga Hartarto stated that the quality of economic growth has improved, reflected in a decline in poverty to 8.25% as of September 2025. Prabowo also reiterated Indonesia’s commitment to maintaining political stability, honoring all international agreements, and remaining open to global investment, supported by Indonesia’s track record of never defaulting on its debt.
– CNN Indonesia, February 14, 2026