President Prabowo Subianto has cast a spotlight on Indonesia’s notably low state revenue-to-Gross Domestic Product (GDP) ratio, identifying it as one of the lowest among the G20 nations.
The President delivered this critical assessment during his speech at a Plenary Session on Wednesday, May 20, as he presented the Macroeconomic Framework and Principles of Fiscal Policy (KEM-PPKF) document for the 2027 Fiscal Year.
Prabowo highlighted that Indonesia’s current state revenue-to-GDP ratio hovers at a mere 11-12%. This figure alarmingly trails behind numerous developing economies across Asia and Latin America, underscoring a significant fiscal challenge that demands national attention.
“Today, Indonesia is a G20 member country, yet our state expenditure ratio to our gross domestic product is the lowest among G20 countries,” Prabowo asserted, emphasizing the scale of the issue. He further elaborated that Indonesia’s state revenue-to-GDP ratio, in particular, stands as the lowest compared to its G20 counterparts, highlighting a fundamental weakness in fiscal capacity.
During his address, he referenced recent data from the International Monetary Fund (IMF) to illustrate this disparity through compelling international comparisons. Mexico, for instance, records a state revenue ratio of 25% against its GDP, India at 20%, the Philippines at 21%, and even Cambodia reaching 15%.
“Indonesia is at 11-12% of GDP. We must introspect, become aware, and bravely question why we cannot manage our economy to achieve state revenues on par with countries like the Philippines or Mexico,” Prabowo urged, calling for a candid national self-assessment and strategic recalibration.
He stressed that this prevailing condition necessitates a comprehensive national evaluation. The President directly challenged why Indonesia continues to lag behind neighboring nations such as Malaysia, and other emerging economies, in optimizing its state revenue collection and harnessing its economic potential.
“What makes us incapable? What is the difference between us and the people of Cambodia, Malaysia, or the Philippines?” he questioned rhetorically, pushing for deeper analysis into the root causes of this fiscal gap.
Despite these pressing fiscal concerns, Prabowo acknowledged Indonesia’s relatively robust economic growth over the past seven years, consistently maintaining an impressive 5% annual expansion, a positive indicator amidst global uncertainties.
The Gerindra Party Chairman concluded by noting that the path ahead involves more than merely sustaining economic growth. The pivotal challenge, he emphasized, is to ensure the nation can manage its vast national wealth more optimally, thereby significantly boosting state revenue for sustained progress and greater national prosperity.
Summary
President Prabowo Subianto has highlighted Indonesia’s state revenue-to-Gross Domestic Product (GDP) ratio, currently at 11-12%, as the lowest among G20 nations. This assessment was delivered during a Plenary Session for the 2027 Fiscal Year’s Macroeconomic Framework. He noted that Indonesia significantly trails other developing economies, referencing Mexico at 25%, India at 20%, and the Philippines at 21%.
Prabowo urged national introspection and a strategic recalibration to understand why Indonesia lags in optimizing state revenue collection. Despite acknowledging the nation’s robust economic growth of 5% annually over the past seven years, he stressed the pivotal challenge of managing Indonesia’s vast national wealth more effectively. The goal is to substantially boost state revenue for sustained national progress and greater prosperity.
