Governor, Bank Indonesia
🔴 Breaking News | DPR Panggil Menkeu Purbaya Hingga Gubernur BI Perry Warjiyo Bahas RAPBN 2027
Menteri Keuangan Purbaya Yudhi Sadewa bersama Gubernur Bank Indonesia Perry Warjiyo dan Kepala Bappenas Rachmat Pambudy menghadiri rapat kerja dengan Badan Anggaran (Banggar) DPR RI untuk membahas Kerangka Ekonomi Makro dan Pokok-Pokok Kebijakan Fiskal (KEM-PPKF) serta RKP 2027. Dalam rancangan awal tersebut, pemerintah menunjukkan optimisme besar dengan membidik target pertumbuhan ekonomi nasional berada di kisaran 5,8 persen hingga 6,5 persen untuk tahun anggaran 2027.
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About Perry Warjiyo
Perry Warjiyo, Governor of Bank Indonesia, has been actively communicating the central bank's policy stance and economic outlook in several meetings with government officials and the House of Representatives (DPR) during May and June 2026. On June 9, 2026, he announced that Bank Indonesia raised the BI rate by 25 basis points to 5.5%, a move he described as necessary to attract foreign portfolio investment and stabilize the rupiah, stating that the central bank "does not like raising interest rates" but that the adjustment was in line with market mechanisms. He also outlined five additional measures, including increasing the yield on SRBI instruments, providing incentives for swap hedging, reactivating repurchase agreement auctions for bank liquidity, and intensifying foreign exchange operations. Warjiyo emphasized that Indonesia's foreign exchange reserves remain "more than sufficient" to support the rupiah, citing an adequacy ratio above 115%. In his appearances before the DPR's Budget Committee on June 9-10, 2026, Warjiyo projected that the rupiah would strengthen to a range of Rp16,800 to Rp17,500 per US dollar by 2027, attributing this outlook to expectations of improving global economic conditions, strong domestic demand, and government policies such as downstreaming and the establishment of new state-owned enterprises. He also forecast economic growth of 5.1% to 5.9% for 2027, with inflation remaining within the target range of 1.5% to 3.5%. Earlier, on May 18, 2026, during a working meeting with Commission XI of the DPR, Warjiyo faced criticism from lawmakers over the rupiah's continued depreciation. Member Primus Yustisio called for his resignation, while Harris Turino questioned the effectiveness of BI's interventions. Warjiyo responded by thanking them for their input and explaining that BI and the government would formulate a new key performance indicator based on exchange rate stability rather than the exchange rate level, predicting the rupiah would strengthen in July and August to an average of Rp16,200 to Rp16,800 for the full year.
Transcript (106 segments)
✨ AI-enhanced transcript with speaker attribution
P
Perry Warjiyo0:00
Truly, we respect the gentlemen and ladies. Today, the working meeting of the Budget Agency is discussing the macroeconomic framework and the main points of fiscal policy for 2027, of course, with the government work plan.
Ladies and gentlemen, in accordance with the rules, 57 people are present and attended by seven factions, and that means the meeting is a quorum. With your permission, ladies and gentlemen, we open it and it is open to the public. Agreed?
Ladies and gentlemen. First, I ask for your permission that after the working meeting, ladies and gentlemen, members of the budget agency and leaders, this working meeting will form working committees consisting of the basic assumptions working committee, fiscal policy, revenue, deficit and financing, the 2027 government work plan working committee, the central government policy working committee, and the regional transfer working committee. Agreed?
U
Unknown1:32
Agreed.
P
Perry Warjiyo1:33
Agreed, ladies and gentlemen?
U
Unknown1:34
Agreed.
Agreed.
P
Perry Warjiyo1:36
If you agree, the working meeting is finished.
U
Unknown1:43
The government agrees.
P
Perry Warjiyo1:47
Good. Ladies and gentlemen, we have received materials from the government. We have carefully reviewed the proposed macroeconomic framework and the main points of fiscal policy for 2027, which we will abbreviate as KEM PPKF 2027, submitted by the government.
We appreciate when our president created a new state tradition by speaking directly at the plenary session to convey the KEM PPKF for 2027. Ladies and gentlemen, the government proposes 2027 macroeconomic assumptions with details: economic growth of 5.8% to 6.5%, inflation of 1.5% to 3.5%, the rupiah exchange rate of 16,800 to 17,500, government bond yields of 6.5% to 7.5%, the Indonesian Crude Price of 70 to 95 USD per barrel, oil lifting of 602,000 to 615,000 barrels per day, and gas lifting of 934,000 to 977,000 barrels of oil equivalent.
High and sustainable economic growth is very important as a national strategy to become a high-income country. We have asked Bank Indonesia to participate in supporting economic growth. It is also very appropriate for Danantara, which has assets of tens of trillions, to participate in shouldering the task of driving economic growth, and Danantara's responsibility must be quantifiable through calculations by BPS. In carrying out the economic strategy, it must be inclusive. Therefore, the logic of fiscal policy must encompass an orchestration of policies between economic growth targets, poverty reduction, unemployment, and social inequality, all of which are accelerating.
Currently, we are facing serious pressure on the exchange rate and government bond yields. Meanwhile, on the stock exchange, our composite stock price index shows a declining graph. Alhamdulillah, today our composite stock price index rose 4.8%.
Ladies and gentlemen, the first thing we need to do is open ourselves to criticism and input, as it is a mirror for ourselves. We summarize a number of inputs from rating agencies, academics, and economists. The government needs to restore the trust of business actors. At least three steps are needed. The government needs to maintain policy consistency. Policy uncertainty is a major risk for business actors. The government should not announce policies that are still premature and instead build productive multi-stakeholder dialogue on various policy plans.
The government needs to manage healthy fiscal policy. We appreciate the government's proposal to submit a 2027 state budget deficit of 1.8% to 2.4% of GDP. This is very encouraging news. Hopefully, it will be more convincing to the market, especially if this year's deficit realization can be lower, at least 2.58% from the APBN target of 2.68% from the existing realization. Hopefully and Alhamdulillah, our deficit in 2025, audited, was not 2.92% of GDP of 23.821 trillion, but our deficit in 2025 was 2.81%. We appreciate the government.
Ladies and gentlemen, in 2027 we will still bear the maturity of interest and principal debt. At the same time, we are faced with the demand to raise debt financing. The government estimates government bond yields at 6.5% to 7.3%. We hope the government will continue to consider these various things. If government bond yields must be higher, we hope it can be offset by productive spending that brings in revenue increases, as it is in line with economic growth. Because the tax-to-GDP ratio over the last three years has relatively declined.
The 2027 KEM PPKF offers eight national priority work program clusters: food sovereignty, energy and water sovereignty, education, health, downstreaming and industrialization, infrastructure, housing and disaster resilience, people's economy and villages, and poverty reduction. The eight programs are a continuation of our medium and long-term development. BMKG warns us to be prepared to face El Niño Godzilla or a very long and prolonged dry season. This situation could threaten the food and water sovereignty programs. Therefore, mitigation must be done as early as possible by the government.
Apologies. We all realize that political turmoil rises and falls like a roller coaster. Learning from the Russia-Ukraine war and the Gulf War, the dynamics are quite long. Food programs require a marathon strategy, requiring long and sustainable breath, while also being clever at seizing opportunities so that domestic food and energy policies become more resilient to national and external turmoil.
In terms of energy sovereignty, there are two priority things that need to be expedited by the government. The government needs to change direction so that production and consumption are synchronized. We export coal to support the world, but domestic energy consumption is from imported fuel. This asynchrony makes the energy policy budget very expensive. It is already very expensive and still has the potential to experience supply disruptions. Even more tragically, we bear the cost of expensive energy imports. However, the implementation of energy subsidies is less targeted. The function of energy subsidies is to absorb economic shocks as a shock absorber for poor households. Thus, the program is expensive but distributed less targeted from year to year.
Ladies and gentlemen, industrialization and downstreaming are two priority programs by President Prabowo to become an industrial nation, with the contribution of industry to GDP being at least 30%. We are currently still at 19% of GDP. In addition, our industrial growth is still below GDP growth on average. The slowdown in the industrial sector impacts the shrinking of the national middle class, and fewer people work in the formal sector compared to the informal sector.
Ladies and gentlemen, before us are the Minister of Finance of the Republic of Indonesia, the Governor of Bank Indonesia, and the Head of BAPPENAS. This shows the real presence of the state not only in the budget agency, but also what will be conveyed to show the public that the three are in agreement, both in fiscal and monetary matters, to maintain the investment climate, to jointly drive productive real sectors, and to maintain our rupiah, which, Alhamdulillah, today our rupiah has appreciated from 18,190 to today 18,022. God willing, hopefully with the hard work of the fiscal and monetary policy mix, the Minister of Finance, the Governor of Bank Indonesia, and all their staff, God willing, at least next week or in 2 weeks or 3 weeks, we build realistic optimism so that the rupiah can recover, at least in 3 weeks to Rp17,500 per US dollar.
U
Unknown12:44
Amen. Amen.
P
Perry Warjiyo12:45
That is roughly our introduction.
U
Unknown12:50
16, how much?
P
Perry Warjiyo12:52
Sir, don't whisper 16,500. Later you'll be asked to be governor and won't be able to do anything.
Yes. Ladies and gentlemen, before we go to the government, I ask for your permission. On your desks, ladies and gentlemen, and also with the government, there is a draft schedule for the preliminary discussion of the 2027 state budget and the 2027 government work plan. Can it be approved?
U
Unknown13:30
Agreed?
P
Perry Warjiyo13:31
Already?
U
Unknown13:32
The government already has.
P
Perry Warjiyo13:36
Good, ladies and gentlemen, I took exactly 12 minutes to deliver my remarks. Hopefully, the Minister is also brief. The Minister of Finance, the Minister of the Government Work Plan, and the Governor of Bank Indonesia. First of all, of course, we invite the Minister of Finance of the Republic of Indonesia to deliver his presentation. We invite you.
U
Unknown14:00
Thank you, Mr. Chairman. Assalamualaikum warahmatullahi wabarakatuh. To the esteemed Chairman and Vice Chairman of the Budget Agency of the DPR RI, the gentlemen and ladies members of the Budget Agency of the DPR RI, the Minister of National Development Planning, Head of BAPPENAS, and the Governor of Bank Indonesia. First of all, let us pray to God Almighty for His abundant grace and blessings so that we can be present at today's working meeting in good health.
We express our highest appreciation to the leadership and members of the Budget Agency of the DPR for this working meeting to discuss the macroeconomic framework and the main points of fiscal policy for 2027. In accordance with the constitutional mandate and the law on state finances, this is a preliminary discussion in the context of preparing the draft state budget for the 2027 fiscal year.
On this good occasion, as an introduction, allow us to present the outline of the material we will present, namely efforts to realize a sovereign, just, and prosperous Indonesia, as well as the economic and fiscal strategy for 2027, which is compiled in an effort to achieve that noble goal.
To begin, we will first explain the main foundation in realizing a just and prosperous Indonesia. Respected leaders and members of the Budget Agency. The 2027 KEM PPKF is a joint commitment compiled with the spirit of realizing the mandate of Article 33 of the 1945 Constitution. The economy is organized as a joint effort based on the principle of kinship. Branches of production that are important for the state and control the lives of many people are controlled by the state. The earth, water, and natural resources contained therein are controlled by the state and used for the greatest prosperity of the people.
We are optimistic about realizing the noble ideal of a sovereign, just, and prosperous Indonesia because we have great potential. We have a strategic geographical position on the world trade route, providing opportunities to become a logistics hub and a center of growth for the Indo-Pacific region. In addition, the demographic bonus can be optimized. The dominance of the productive age population not only increases production capacity but also supports strong and resilient domestic consumption. The abundance of natural resources such as coal, nickel, CPO, and fisheries potential becomes important capital to drive downstreaming and the creation of high added value domestically. All this potential is supported by consistent fiscal discipline, which has been maintained. This becomes the anchor of economic stability and the sustainability of development financing.
Indonesia shows solid economic fundamentals amid global uncertainty. In the first quarter of 2026, the Indonesian economy grew by 5.61% year-on-year, which is the highest first-quarter growth since 2014. This performance is supported by inflation that is controlled at a low level, namely 3.08% in May 2026, thus helping to maintain people's purchasing power.
This condition is also supported by adequate domestic economic liquidity, providing enough room for the banking sector to increase credit distribution to support economic activities. From the external side, the trade surplus has continued for 72 consecutive months until April 2026. Meanwhile, foreign exchange reserves as of May 2026 are adequate as a buffer against external risks at 144.9 billion US dollars, or equivalent to 5.6 months of imports. This is above the international adequacy standard of around 3 months of imports.
In line with these various positive indicators, the performance of the manufacturing sector also showed improvement in May 2026, indicating a strengthening of production activities and becoming a positive signal for the sustainability of our economic growth going forward.
Entering the second half of the year, economic activity dynamics show an improving trend. Next. Yes, consumers are still optimistic to continue consuming, reflected in shopping activities monitored through the Mandiri Spending Index and the Consumer Confidence Index from Bank Indonesia.
The positive activity of the community is also reflected in the sales of a number of goods such as vehicles, both cars and motorcycles, electricity, and cement sales. Yes, electricity sales grew significantly for all activities, whether household, business, or industrial. Cement sales indicate that construction activities remain strong and various government programs are running, providing a multiplier effect on physical construction activities.
Meanwhile, the performance on the production side shows a positive improvement. The performance of the manufacturing sector has begun to show signs of returning to expansion after experiencing pressure in April.
Indonesia's economic performance is also in a better position in a global perspective. Indonesia's economic growth is at a high level and supported by low inflation compared to G20 and other peer countries. The same is true for Indonesia's fiscal performance. The deficit and debt-to-GDP ratio are at prudent and manageable levels compared to G20 and peer countries. This shows that Indonesia's economic stability and fiscal sustainability are maintained.
Indonesia's energy resilience is also strong. JP Morgan Asset Wealth Management and the Asian Development Bank assess that Indonesia has a fairly strong level of energy resilience against global energy crisis turmoil, even compared to China and the United States. This resilience is mainly supported by Indonesia's low dependence on energy imports, which is only 1.38% of GDP, far lower than countries like China, India, and Thailand.
Indonesia's strong economic resilience is inseparable from the prudent and sustainable management of the state budget in supporting the development agenda. The performance of state revenue, including the tax ratio, continues to move in line with the recovery and expansion of economic activities, reflecting an increasingly solid revenue base. On the other hand, the primary balance shows significant improvement and is approaching a positive zone, indicating increasingly maintained fiscal health.
The budget deficit and debt-to-GDP ratio also remain within safe and controlled limits post-pandemic, thus providing adequate fiscal room to maintain stability while supporting sustainable economic transformation.
However, we realize that until now, the global economy is still moving very dynamically. Therefore, fiscal policy is designed to remain responsive and anticipatory to mitigate uncertainty through nine strategic policies as follows. First, we maintain the stability of subsidized fuel prices. Second, maintain food price stabilization. Third, maintain energy supply and rice stocks at safe levels. Fourth, guarantee fiscal discipline by controlling the deficit below 3% of GDP. Fifth, encourage efficiency and refocusing of spending. Sixth, optimization of natural resource-based revenue while maintaining macro stability, among others through the arrangement of foreign exchange proceeds and improving the governance of strategic natural resource exports. Seventh, provide a stimulus package to maintain purchasing power, business sustainability, and support growth, including ticket discounts, food assistance, housing incentives, and apprenticeship and vocational programs. Eighth, improve the spending absorption pattern to be faster and more evenly distributed, changing the phenomenon of absorption that was all slow to quick high, so that it strongly supports economic growth evenly throughout the year. Ninth is to strengthen synergy and collaboration between fiscal and monetary policies to maintain stability and drive economic growth.
The strong domestic economic fundamentals, supported by an increasingly integrated policy direction and increasingly solid synergy between instruments, become a solid foundation in welcoming 2027.
Respected leaders and members of the Budget Agency. Based on the presentation regarding the noble ideals, potential, and solid domestic economy, we will next explain the direction and strategy of the economy and fiscal policy for 2027 as an effort to achieve the development targets that have been set.
The 2027 KEM PPKF is very special and has very strategic value because for the first time in history, it was delivered directly by the President. This reflects the government's strong commitment in ensuring the direction of future economic and fiscal policy to drive economic growth and improve people's welfare. Through the 2027 KEM PPKF, the government ensures that fiscal, monetary, financial sector, and Danantara policies are increasingly synergistic in supporting the development agenda. At the same time, the government also strengthens the effectiveness of social protection programs for the poor and provides flexibility in managing regional budgets to encourage the quality of public services, equitable development, and the welfare of civil servants in the regions.
Observing the current economic dynamics and its prospects going forward, we are optimistic that the Indonesian economy can spin faster and grow higher as a foundation for improving people's welfare. With that conviction, the 2027 fiscal policy is directed to encourage the economy to grow higher and achieve prosperity faster.
To optimize this policy direction, solid synergy and collaboration are needed between fiscal, monetary, and financial sector policies. This synergy is carried out proportionally, mutually reinforcing each other, so as to provide optimal impact on the economy and society. Through solid collaboration, it is hoped that the financial sector will spin fast and the real sector will move strongly, thus driving the economy to grow higher and ultimately, welfare can be achieved faster.
For that, the state budget is focused on meeting public needs and acting as a catalyst to revive the role of the private sector in accelerating growth and improving welfare. Meanwhile, the main role of Danantara is directed to accelerate productive investment in strategic sectors with high added value. Danantara's investment strategy is aligned with the government's priority programs and as a lever for private sector involvement to achieve economies of scale.
Meanwhile, monetary policy is not only focused on maintaining stability but is also directed to support economic growth while guaranteeing the independence of the central bank. The financial sector continues to be strengthened to become more inclusive, deep, and stable, so that it is able to drive consumption and investment activities with a competitive cost of fund and optimal and effective intermediation function to the sectoral level, thus increasing economic activity more significantly.
This strengthened synergy is expected to be able to drive economic growth in 2027 in the range of 5.8% to 6.5%, with a trajectory towards 8% in 2029. This achievement must be supported by very strong investment acceleration, namely in the range of 6.5% to 7.5%, especially in sectors with high added value.
Strong investment to drive economic growth is supported through fiscal, monetary, and financial sector synergy, as well as Danantara. The government will also optimize debottlenecking and deregulation steps to comprehensively improve the domestic investment climate. This effort is directed, among others, at simplifying the licensing process, strengthening legal capacity, and improving cross-sector and institutional coordination, so that various structural obstacles that have so far hindered investment realization can be eliminated immediately.
In order for efforts to drive growth and improve welfare to run more effectively, fiscal policy is focused on supporting eight clusters of national priority programs and one supporting program or enabler, covering 60 work programs. The eight PKPN clusters are: first, food sovereignty; second, energy and water independence; third, education; fourth, health; fifth, downstreaming and industrialization; sixth, infrastructure, housing, and disaster resilience; seventh, strengthening the people's economy and village development; and eighth, poverty reduction. Meanwhile, the supporting program or enabler is strengthening in the fields of defense and security, law enforcement, governance, accelerating digitalization, and economic diplomacy.
For that, the state budget must be kept healthy, credible, and sustainable. In that framework, the government continues to carry out fiscal reform for the optimization of state revenue while maintaining the investment climate and environmental preservation. Strengthening the quality of spending through efficiency and refocusing policies that are increasingly productive, as well as innovative, prudent, and sustainable deficit financing management.
In line with these efforts, the architecture of the 2027 fiscal policy is designed to be collaborative, directed, and measurable, with a deficit of 1.8% to 2.4% of GDP. To support this, state revenue is projected in the range of 11.82% to 12.4% of GDP with a tax ratio ranging from 10.02% to 10.5% of GDP. Meanwhile, spending...
The fiscal deficit is planned to be in the range of 13.62% to 14.80% of GDP. The 2027 macro-fiscal posture has accounted for the funding needs of various PKPN, estimated to reach Rp1,720 trillion to Rp1,896.86 trillion, allocated through central government spending, optimization of transfers to regions and village funds, and budget financing.
Honorable leaders and members of the Budget Agency. With the right economic strategy and prudent and sustainable fiscal policy, the government is optimistic that the Indonesian economy in 2027 can grow strongly in the range of 5.8% to 6.5%. This growth rate becomes a strong foundation towards 8% growth in the medium term.
Meanwhile, inflation will be kept under control in the range of 1.5% to 3.5%. With economic and financial sector stability well maintained, the 10-year SBN yield is in the range of 6.5% to 7.3%, supported by attractive yields and a competitive spread with US Treasury bonds, in addition to global investor confidence in Indonesia's economic and financial sector stability.
Maintained global investor confidence will encourage increased capital inflows, contributing positively to the stability of the Rupiah exchange rate against the US dollar, which is in the range of Rp16,800 to Rp17,500.
The ongoing global political escalation, particularly in the Middle East, and pressure on global economic activity make the Indonesian crude oil price estimated at 70 to 95 dollars per barrel. Meanwhile, oil lifting is 602,000 to 615,000 barrels per day and gas lifting is 934,000 to 977,000 barrels of oil equivalent per day.
Solid economic stability and growth, supported by effective fiscal policy, are drivers for accelerating the improvement of people's welfare. The poverty rate is targeted to fall to the range of 6% to 6.5%. The open unemployment rate is in the range of 4.3% to 4.87%.
This ratio is targeted to continue improving in the range of 0.362 to 0.367. The human capital index is also targeted to improve to 0.575. The farmer welfare index increases to 0.8038. Meanwhile, the proportion of formal employment increases to 40.81%.
That concludes our explanation of the macro-economic framework and the main points of the 2027 KEM PPKF fiscal policy for discussion and approval by the Budget Agency. Perhaps, Mr. Chairman, this exceeded 7 minutes, but I cannot make things up. If I make things up, they say I like to say all sorts of things, so I have to read this continuously. Thank you. We return to the leadership. Wassalamualaikum warahmatullahi wabarakatuh.
Waalaikumsalam. Thank you. We in the leadership certainly wouldn't dare to tell Mr. Purbaya. God knows who tells Mr. Purbaya. It certainly isn't from the leadership.
Ladies and gentlemen, the government has presented the macro-economic framework and the main points of fiscal policy, as well as what is to be achieved: grow faster, grow higher, prosper faster. That is roughly the theme the government wants to convey.
Ladies and gentlemen, we respectfully invite the Minister of PPN and Head of Bappenas to present the RKP 2027. Please.
Thank you, Mr. Chairman. Bismillahirrahmanirrahim. Assalamualaikum warahmatullahi wabarakatuh. Greetings of prosperity to us all. Shalom. Om swastiastu. Namo buddhaya. Greetings of virtue. The Honorable Chairman and Vice Chairman, the leaders of the Budget Agency of the DPR RI, and the members of the Budget Agency of the DPR RI.
Today I am accompanied by the government representative, the Minister of Finance. The Honorable Governor of Bank Indonesia. And the Honorable audience. Ladies and gentlemen, leaders and members of the DPR whom I respect, as well as representatives of the government and heads of central banks, state banks. Today we present, as conveyed by the leadership, the 2027 Government Work Plan as part of the previous discussion on the 2027 State Budget.
For the government, the 2027 RKP is not just an annual document or a shopping list, but a work map to translate the president's mandate into development work whose results can be truly felt by the people. What we bring to the DPR today is not just a planning document. What we bring is the government's work map to ensure the president's agenda reaches the people, from the 2025-2045 RPJPN, the 2025-2029 RPJMN, national priorities, national priority work programs, and national strategic projects to the 2027 State Budget, where every program and every rupiah must be locked into development benefits.
Ladies and gentlemen, 2027 is a year of acceleration and a year of execution, so the results must be felt. Food stronger, energy more independent, schools and hospitals better, industry more value-added, villages more productive, poverty down, and jobs increase. We hope stability is maintained, transformation is accelerated, and results continue to be felt by the people.
The 2027 RKP is built on the most fundamental foundation, as conveyed by the Minister of Finance, namely Pancasila, the Preamble to the 1945 Constitution, especially Article 33 of the 1945 Constitution. The goal is to ensure national development remains consistent, namely protecting the entire nation, advancing public welfare, educating the nation's life, and participating in maintaining world order.
Ladies and gentlemen, therefore, the draft 2027 RKP is compiled in three attachments: the first book is the national priority work program, the second book is the direction of central and regional development, and the matrix of regional development direction to ensure every rupiah used has a real impact. The 2027 RKP is directed to answer the need for accelerated growth that is increasingly quality. High growth must not be vague; it must be concrete and truly felt by the wider community.
National priorities provide the broad direction of development, in line with the RKP theme, namely accelerating quality growth through productivity, investment, and industry. Meanwhile, national priority work programs become the most priority programs and activities to be implemented in 2027, with national strategic projects remaining an instrument of acceleration. The point is that high growth will be achieved from priority programs that have a large multiplier for development.
Why do we need faster growth acceleration? Indonesia has been in the middle-income trap for too long. Indeed, since 1993, Indonesia has exited the low-income category, but it has not yet been able to jump to become a high-income country. The 1998 crisis and the Covid-19 pandemic also showed that the economic foundation is still vulnerable to shocks. Therefore, more fundamental strengthening is needed. And therefore, high growth is needed to increase national production capacity, increase per capita income measured through GNP per capita, and expand employment opportunities as well as strengthen industrial competitiveness.
Ladies and gentlemen, in accordance with the President's direction in 2027, PKPN, the national priority work program, becomes a work instrument so that the President's priorities are implemented more holistically, more integrated, and more evenly in the national development ecosystem from the center to the regions. PKPN consists of 60 programs spread across 8 PKPN clusters, covering food, energy and water, education, health, downstreaming, infrastructure, people's economy, and villages as well as reducing the number of poor people. The point is that these eight clusters do not run independently.
Food is connected to nutrition, nutrition is connected to education, education is connected to productivity, productivity is connected to industry, industry creates jobs, jobs reduce the number of poor people, and all of this requires interconnected and interrelated infrastructure. Furthermore, PKPN is designed to be integrated and have an impact on development. An example is the integrated food area PKPN, where the government not only encourages production but also ensures quality standards, farmer assistance, regional productivity, and is supported by infrastructure that runs in a single unit and is implemented by multiple ministries and institutions.
In this way, PKPN not only produces activity outputs but builds a food ecosystem that is more productive, connected, and directly impactful for the community. Another example is the PKPN for the formation of 80,000 red and white village cooperatives. Cooperatives are not only formed administratively but to become drivers of the village economy, cooperatives need to be supported by digital infrastructure, data access, value chains, production facilities, assistance, training, and strong institutions. Therefore, this program also involves various ministries and institutions in an integrated manner so that it has an impact from the center to the village.
From interventions to benefits, and from programs driving the people's economy to driving a massive economy from Aceh to Papua. Ladies and gentlemen, members of the council, for this reason, the 2027 RKP theme is translated into development targets to maintain the growth momentum towards 8% in 2029. And as conveyed by the Minister of Finance, economic growth is targeted at 5.8 to 6.5 and this is directed to be more sustainable. The point is that we are also responsible for global development programs, where we are responsible for reducing greenhouse gas emissions, which means it is related to improving the overall quality of the environment.
On the welfare side, poverty is targeted to fall from 6% to 6.5%. So we must together ensure that growth creates added value and more equitable welfare. And in this context, we hope that no one is left behind. No one should be left behind in our national development. Ladies and gentlemen, members of the council, national growth must not only be strong in aggregate but also equitable across regions.
The map prepared by Bappenas shows that the target economic growth of provinces varies. And this reality we really need to note well because growth varies between 4.1% to 24%. Meanwhile, the Gini ratio is also in the range of 0.2 to 0.4. On one hand, there are regions with very high growth, but on the other hand, there are those that are still low. This means that regions with high growth must still be guarded so that the benefits are not only concentrated in certain groups.
Ladies and gentlemen, members of the council, and my colleagues representing the government. It needs to be our collective thought that the goal of an independent Indonesia is to present welfare and a better life for all Indonesian people. Growth must not only chase numbers. Growth must create jobs. Growth must reduce poverty. Growth must improve the quality of human resources and open access to more equitable economic opportunities for villages, especially lagging regions.
Ladies and gentlemen, as a closing, allow me to convey that the 2027 RKP is compiled as an acceleration or acceleration to achieve higher growth so that poverty falls faster, more jobs are created, and the quality of human resources improves better so that they all receive development benefits more equitably. For that, once again, we hope for the support of the House of Representatives in overseeing the consistency of the development work plan with the KEM PPKF that was just conveyed by the Minister of Finance. And we also need oversight in implementing our State Budget. We oversee the 2027 RKP from plan to results, from programs to benefits, from growth to welfare, and produce more equitable welfare. Thank you. Assalamualaikum warahmatullahi wabarakatuh.
Waalaikumsalam warahmatullahi wabarakatuh.
There is the late Prof. Dr. Sumitro Djojohadikusumo. There is our President, as lined up earlier by the Minister of Bappenas, that we want growth not just for growth, but inclusive, equitable growth so that inequality is not created. That was also conveyed by the Minister of Finance everywhere. The two indeed seem like brothers.
Ladies and gentlemen, it is now the turn of our Governor of Bank Indonesia. Please.
P
Perry Warjiyo49:11
Thank you, sir. Bismillahirrahmanirrahim. Assalamualaikum warahmatullahi wabarakatuh. Greetings of prosperity to us all. Shalom. Om swastiastu. Namo buddhaya. Greetings of virtue. To the Honorable Chairman, all leaders and members of the Budget Agency of the DPR RI, the Minister of Finance and all his staff, the Minister and Chairman of Bappenas and all staff, and all colleagues. Thank you for the opportunity for us to add various views of Bank Indonesia, especially regarding the macro assumptions that will be used as the basis for the preparation of the 2027 State Budget.
Much has been conveyed by the Minister of Finance and the Minister, Chairman of Bappenas. If I may, I will go directly to slide number 6, which is about a number of macro assumption views, especially regarding economic growth, inflation, and the exchange rate. For economic growth, we also believe, in line with the government's view, that 2027 will be much better than 2026. Our range is 5.1 to 5.9, but we believe it will be closer to the upper limit.
As mentioned earlier, one is how sectoral transformation policies, especially for downstreaming and industrialization programs of natural resources, including the establishment of PTDSI and PPDHE, will all drive higher economic growth. Second, very strong domestic demand. Thank you, Minister of Finance, for the many stimuli to drive the people's economy, including free meals, red and white village cooperatives, and others. Third, close synergy with village banks. We will continue, as directed by the Chairman, to support economic growth from the policy side, especially macroprudential and payment systems for MSMEs and others, which we will explain in more detail later.
Second, regarding the exchange rate, we also view that in 2027 the exchange rate will strengthen, the Rupiah range is the same as the government's, 16,800 to 17,500. There are five main factors underlying why the Rupiah in 2027 will range from 16,800 to 17,500 and strengthen there. First, of course, economic conditions will not be as bad as this year and will improve. Global economic growth will rise to 3.1%. Of course, we hope geopolitical conditions will ease and hopefully encourage inflows to emerging market countries, including Indonesia.
Second, as the Minister of Finance always says and I always repeat, Indonesia's economic fundamentals are good and will support the strengthening of the Rupiah exchange rate: high economic growth, low inflation, low current account deficit, attractive yields, and foreign exchange reserves are more than sufficient. So our fundamentals will support the strengthening of the Rupiah exchange rate. The third, which is new, is the President's policy for single-door exports regarding PT Sumber Daya Indonesia. Because this will increase exports, then increase foreign exchange from exports, increase state revenue, so this will support not only financing for economic growth but also support the increase in foreign exchange, foreign exchange reserves, and the strengthening of the Rupiah exchange rate.
Fourth is the strong commitment of the nation to continue maintaining the Rupiah exchange rate, both through intervention and various other policies that I will explain shortly. Fifth is the close coordination of fiscal and monetary policies, the government's fiscal policy and Bank Indonesia's monetary policy. Including from time to time, we continue to be close, and recently we are both focused on maintaining the stability of the Rupiah exchange rate, which yesterday we announced together how fiscal and monetary together stabilize the Rupiah exchange rate, namely increasing the attractiveness of investment yields for foreign portfolio investors and also maintaining sufficient liquidity, which we conveyed yesterday was a swap. So with these five factors, God willing, the Rupiah next year will strengthen in the range of 16,800 to 17,500.
Inflation is also the same for us, 2.5% plus minus 1% or a range of 1.5% to 3.5%, because of course our good economic conditions and also the synergy of the government and the central and regional inflation control teams. We continue to mobilize our 46 offices together with the government to maintain price stability. Those are our views on macro assumptions related to growth, exchange rate, and inflation. Optimistic now is better, next year God willing will be better. Therefore, synergy is important.
On the next slide, we will explain the seven steps of Bank Indonesia in monetary policy. So our monetary policy is directed towards stability. There are seven steps to maintain stability, especially the Rupiah exchange rate, which we have conveyed on various occasions. One, we continue to intervene in the market, both in the domestic market and abroad, through spot or forward transactions, domestically and abroad. Our foreign exchange reserves are maintained at more than sufficient levels to maintain the stability of the Rupiah exchange rate.
Second is adjusting interest rates. Today we raised it again to 5.5%. We do not like raising interest rates, but to attract foreign portfolio investment that is currently abroad, interest rates everywhere are rising. So the adjustment is in line with market mechanisms. Third is also increasing foreign capital inflows through SRBI, which we continue to coordinate with the government so that investment in SRBI, SBN, and stocks increases. Fourth, our fiscal-monetary coordination is to maintain liquidity in the money market and banking at more than sufficient levels, namely the growth of base money is always double-digit, the last was 14.8%, and in the coming months we will always maintain it at double-digit.
Fifth is lowering the limit for purchasing dollars in the market without underlying, which applies from June at 25,000 per actor per month. Sixth, as I mentioned earlier, Mr. Chairman, is expanding foreign exchange transactions domestically. Not only Rupiah-dollar but also Rupiah-yuan. Rupiah-yuan is now transacted domestically with the increasing transaction of yuan-rupiah for trade settlement and investment between Rupiah and China, which we call local currency transaction. Seventh, we also deploy supervision to banks and corporations in coordination with OJK to ensure that foreign exchange transactions in banking are with underlying.
Those are the monetary focuses for pro-stability. Mr. Chairman mentioned earlier BI's support for growth. We use the next slide for macroprudential policies and payment systems that drive growth. One, we are purchasing SBN both from the primary and secondary markets, which this year is Rp152 trillion. And that is certainly part of our support for the Minister of Finance for development financing, as conveyed by the Minister of Finance for various budget allocations that will be discussed in this Council next year.
Second, we also provide liquidity incentives for banks that channel credit to priority sectors supporting Asta Cita. Until May 1, 2026, we have disbursed additional liquidity incentives to those banks of Rp42.7 trillion in credit to sectors supporting Asta Cita. The details of the banks are there, SOEs Rp14.2 trillion and so on. Third is the relaxation of all macroprudential policy instruments, whether down payment or macro intermediation ratio, and also in synergy with the Ministry of Finance, OJK, business world, and banking, is the program to accelerate banking intermediation in the center and regions.
Fourth is accelerating the digitalization of payment systems for economic growth, for the people, MSMEs, inclusion, and so on with QRIS. With various efforts, we continue to improve QRIS, which is now used in various countries, including most recently with China, Japan, and South Korea. Please pray that it can connect to Saudi Arabia for Umrah and Hajj. Fifth is MSME development programs through Bank Indonesia's 46 offices, both conventional related to coffee and textiles, as well as related to Islamic economics and finance.
Mr. Chairman, hopefully I did not exceed 10 minutes, but the point is: one, optimistic this year and next year will be better. Two, Bank Indonesia always synergizes closely with the government. Monetary for stability, macro for growth. We ask for your prayers and support. Thank you. May Allah Subhanahu wa Ta'ala bless us all. Wassalamualaikum warahmatullahi wabarakatuh.
U
Unknown1:00:26
Alright, ladies and gentlemen, thank you very much to the Governor of Bank Indonesia. Hopefully, the acceleration of payment system digitalization and the last point conveyed, local currency transaction, after China with India, after India with Gulf countries, they pay in rials, we prepare Rupiah. If Rupiah three sacks, we can still manage so that we are not addicted to the US dollar, but de-dollarization.
This is an effort to protect our sovereignty as a nation. Ladies and gentlemen, the introduction has been presented, the government has presented, the Governor of BI has presented. Ladies and gentlemen, the working committee has been approved. That means the leadership is taking leave. We will deepen it in the working committee that we will form. Wassalamualaikum warahmatullahi wabarakatuh.
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Waalaikumsalam warahmatullahi wabarakatuh. Waalaikumsalam.