Private-sector financing is expected to account for 91% of the country’s projected Rp8,705 trillion investment requirement next year
Indonesia will need to mobilize substantially more private capital to finance its development agenda, with total investment requirements projected to reach Rp8,705 trillion (US$501.0 billion) in 2027, far exceeding the government’s fiscal capacity.
Deputy Finance Minister Juda Agung said the state budget, or APBN, can cover only around Rp459 trillion (US$26.4 billion) of the projected requirement, while state-owned enterprises, including Danantara, are expected to contribute another Rp330 trillion (US$19.0 billion).
The remaining Rp7,973 trillion (US$458.6 billion), or around 91% of the total requirement, will need to come from private-sector financing, including bank loans, other financing instruments and the capital market.
“The APBN can only cover around Rp459 trillion. Another Rp330 trillion will come from state-owned enterprises, including Danantara. The remainder, or around Rp7,973 trillion, must largely come from private-sector financing, whether through banks, other financing sources or the capital market,” Juda said at the launch of the Gold ETF and the anniversary of Indonesia’s capital market (10/8/2026).
Juda said the scale of the funding requirement highlights the strategic role of Indonesia’s capital market in connecting corporate financing needs with funds held by households and investors.
“The capital market is a bridge connecting corporate financing needs with public funds. It is an efficient, transparent and equitable source of financing,” he said.
He added that Indonesia needs to continue deepening its capital market by improving liquidity, market depth, investor confidence and credibility.
“The capital market serves as a catalyst for national economic growth. Therefore, we must build an Indonesian capital market that is deep, liquid, trustworthy and credible so that it can optimally facilitate investment and support ambitious economic growth targets,” Juda said.
Fiscal space remains constrained
Juda said the APBN remains on track despite continued uncertainty in the global economy, with state revenue growing around 24% while government spending has supported economic growth during the first two quarters of 2026.
He said the government would continue to maintain fiscal discipline and keep the budget deficit below the 3% of GDP threshold.
“We at the Ministry of Finance are working hard to maintain the health of the APBN as the main instrument for economic growth and public welfare, while exercising prudence in managing the fiscal position and keeping the deficit below 3%,” he said.
Nevertheless, Juda stressed that the APBN cannot serve as the sole source of funding for Indonesia’s development agenda.
The country’s investment requirements span infrastructure, energy, education, human capital development and downstream industrialization, all of which require financing on a scale well beyond the government’s fiscal capacity.
This makes the ability of Indonesia’s private financial system and capital market to mobilize long-term funding increasingly critical to achieving the government’s growth and development targets.