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A lack of satisfying answers on how to reach growth goals set forth in the freshly unveiled 2026 state budget has led economists to conclude that the fiscal document is based more on political ambition rather than on technocratic calculation.
Indonesia needs a gradual increase in defense spending to a minimum of 1.5 percent of GDP, prioritizing, among other matters, public-private collaboration, ensuring a sustainable modernization.
The seemingly positive fiscal trajectory hides a deeper vulnerability: the growing burden of debt servicing, which is steadily consuming a significant portion of the government’s revenue and narrowing its fiscal space.
Challenges in implementation are to be expected in the nascent stages of any government intervention, especially in a country as geographically vast and varied as Indonesia. The key is to build upon their lessons, bit by bit, to ensure a strong foundation for sustainable delivery and development.
The Constitutional Court's ruling on May 27, mandating that central and regional governments provide free education at elementary and junior high levels for all public and private schools, aims to promote equality in access to basic education. However, it is feared this decision may place a substantial financial burden on the state budget and have far-reaching implications for the operations of private schools in Indonesia, particularly premium ones.
