As of April 2026, Indonesia’s state budget (APBN) deficit has reached Rp 164.4 trillion, a decrease from the previous month’s figure of Rp 240.1 trillion. Despite this improvement, economist Vid Adrison warns that the situation could deteriorate, potentially pushing the deficit beyond the critical 3% threshold if the government continues to overlook underlying fiscal challenges.
Addressing Fiscal Concerns to Stabilize the Rupiah
Speaking after an open discussion hosted by the Alliance of Indonesian Economists in Jakarta on Saturday, May 23, Vid emphasized that the volatility of the rupiah is deeply tied to the government’s response to economic realities. He argued that the current administration’s reluctance to acknowledge domestic fiscal and economic issues is hindering efforts to restore investor confidence.
“The movement of the rupiah depends heavily on the government’s response,” Vid stated. “If people have confidence in the economy, they will not be hesitant to hold their assets in that currency.” According to Vid, investor trust is built on a track record of government performance; solid management fosters positive future expectations, which is essential for stabilizing the national currency.
External Pressures and Subsidy Challenges
Beyond domestic policy, external geopolitical factors remain a significant threat to the state budget. The ongoing conflicts involving the US, Israel, and Iran have increased the risk of rising global oil prices. Such spikes place immense pressure on Indonesia’s state budget due to the rising costs of energy subsidies.
The government faces a difficult dilemma: if these costs are passed on to the public, the nation risks a sharp decline in purchasing power. “The government must cut other areas of the budget to ensure they have the resources to support those negatively impacted,” Vid noted.
Optimizing the Nutritious Free Meal Program
One potential area for budget reallocation is the Nutritious Free Meal (MBG) program. Finance Minister Purbaya Yudhi Sadewa recently announced plans to adjust the MBG budget to Rp 268 trillion, down from the initial projection of Rp 335 trillion. This adjusted figure aligns with the original budget ceiling proposed by the National Nutrition Agency for 2026.
Vid suggested that the program could be more effective if it is surgically targeted rather than implemented as a blanket policy. Since only specific segments of the population face urgent food security concerns, focusing resources on those in genuine need could be a strategic solution. By refining the reach of the program, the government can fulfill its promises, reduce expenditure, and keep funds available for other vital public services.
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Summary
Indonesia’s state budget deficit reached Rp 164.4 trillion by April 2026, prompting economist Vid Adrison to warn that the figure could exceed the 3% GDP threshold without significant fiscal reform. The current volatility of the rupiah is closely linked to investor concerns regarding domestic economic management and the government’s transparency. Addressing these issues is essential to restoring market confidence and stabilizing the national currency.
External geopolitical tensions further complicate the fiscal outlook by threatening to drive up global oil prices and inflate energy subsidy costs. To mitigate these pressures, the government is adjusting the budget for the Nutritious Free Meal (MBG) program to Rp 268 trillion. Economists suggest that by surgically targeting this program toward vulnerable populations instead of adopting a blanket approach, the government can optimize spending and preserve fiscal stability.
