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View all search resultsKadin warns of slowing regional growth amid budget cuts
At its 2026 economic outlook event on Jan. 15, Kadin cautioned against maintaining last year's budget policy to reduce regional transfers amid current global conditions, as doing so would only hamper local growth and exacerbate weakening demand.
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Aviliani (left rear, at podium), deputy chair of macro- and microeconomic policy analysis at the Indonesian Chamber of Commerce and Industry (Kadin), speaks on Jan. 15 at the Kadin Global and Domestic Economic Outlook 2026, themed “Strengthening the Role of the Private Sector in Economic Growth: Pro-Growth, pro-poor, pro-job and pro-environment”, at Menara Kadin in Kuningan, South Jakarta. (Kadin/-)
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he Indonesian Chamber of Commerce and Industry (Kadin) has warned that lower regional funding allocations as set in the 2026 state budget risk slowing local growth and further pressuring weakening household demand.
“With reduced regional transfers, local economic growth will be affected. That is why this is part of our feedback, so that going forward, there will be an evaluation of the reduction in regional transfers that needs to be restored,” Aviliani, Kadin’s deputy chair of macro- and microeconomic policy analysis, told a press conference following the Kadin Global and Domestic Economic Outlook 2026 on Thursday.
Aviliani said regional economies had received insufficient attention in policymaking, despite their growing role in national economic performance.
“Even if the funding comes from the central government, [its disbursement] should still involve the regions so local administrations feel they are still included,” she said.
The central government cut a significant portion of regional transfers last year and has maintained the policy in the 2026 state budget plan.
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Aviliani also highlighted growing global risks and warned that if the rupiah weakened beyond Rp 17,000 per United States dollar, this would put pressure on foreign debt servicing, import costs and inflation. Such a scenario would leave manufacturing and food prices highly exposed, as 70 percent of industries relied on imported inputs.
