Indonesia’s state budget remained on course through August despite an increase in government spending, Finance Minister Suahasil Nazara said Tuesday, emphasizing controlled fiscal discipline amid accelerated outlays and growing state revenue.

As of August 31, government expenditure reached approximately 2.3 quadrillion rupiah, representing nearly 60% of the 3.8 quadrillion rupiah allocated for the full year. This marked a 17.1% year-on-year rise in spending, with ministries and government institutions accounting for a notable 33% jump to 912.4 trillion rupiah.

Meanwhile, state revenue hit 2.1 quadrillion rupiah, or 65% of the annual target, reflecting a 25.4% increase compared to the previous year. Tax revenue grew by 24.1%, supported by a 41.7% boost in non-tax revenue, which reached 435.1 trillion rupiah.

These figures helped keep the budget deficit at 240.1 trillion rupiah as of August, equivalent to 0.93% of gross domestic product (GDP). The finance ministry projects the full-year deficit to reach 2.85% of GDP in 2026, slightly improving on last year’s 2.92% figure, and remaining within the 3% legal ceiling established after the 1997-1998 Asian financial crisis.

“The state budget is here to protect the public,” Suahasil said during a press briefing. He highlighted government programs such as energy subsidies, the Family Hope Program, and social protection measures aimed at preserving purchasing power and economic welfare. “That is why the state budget must remain credible,” he added.

Suahasil assumed office as finance minister last week, succeeding Purbaya Yudhi Sadewa, becoming the third finance minister in under two years since President Prabowo Subianto took office. His appointment is viewed as an effort to reassure investors and maintain market confidence over Indonesia’s fiscal management.

Economist Yusuf Rendy Manilet of the Centre of Reform on Economics noted that the government’s acceleration in spending, particularly the 33% rise in ministries’ expenditures, was important for sustaining economic activity. He pointed to a substantial 67.5% increase in goods spending, which quickly circulates through the economy.

Yusuf cautioned that while there is room to accelerate expenditure in the final quarter of the year, it should be carefully aligned with revenue flows and fiscal capacity. He warned against a year-end rush to meet budget absorption targets, which could lead to inefficient spending.

Instead, he urged the government to prioritize programs that are ready for implementation and could effectively bolster economic growth through government consumption and domestic demand. He stressed that the overall impact would largely depend on how swiftly and efficiently funds could be disbursed to households, businesses, infrastructure projects, and domestic supply chains.