May 20, 2026 | 01:03 pm
TEMPO.CO, Jakarta - The Indonesian government targets the rupiah exchange rate to be in the range of Rp16,800 to Rp17,500 per US dollar in the 2027 Macroeconomic and Fiscal Policy Framework (KEM-PPKF). President Prabowo Subianto conveyed this during the Plenary Session of the House of Representatives (DPR) while presenting the KEM-PPKF 2027 document in Jakarta on Wednesday, May 20, 2026."Our fiscal and monetary strategy must be able to maintain the stability of our exchange rate against the world's currencies," said Prabowo, as quoted from Antara.The macro assumptions targets were set by the government amid heavy pressure on the domestic currency, which briefly touched a record low of Rp17,706 per US dollar at the close of mid-May 2026 spot market trading.Through a measured fiscal policy mix, the government projects that domestic inflation can be tightly controlled in the range of 1.5 to 3.5 percent to support the stability of people's purchasing power and the exchange rate.The rupiah exchange rate assumption also complements other fiscal macro indicators, including the 10-year government bond target interest rate, which is expected to be between 6.5 and 7.3 percent.From a fiscal posture standpoint, the government plans for the 2027 State Budget deficit to be in the range of 1.8 to a maximum of 2.4 percent of Gross Domestic Product (GDP). This reflects the government's strong commitment to continuing to reduce and narrow the budget deficit. The 2025 state budget deficit was 2.92 percent, 0.8 percent lower than the maximum threshold of 3 percent.National spending policies allocate 13.62 to 14.80 percent of GDP to fund national priority programs. Meanwhile, state revenue is targeted to reach 11.82 to 12.40 percent of GDP.With sustainable fiscal management, the government is confident that national economic growth will reach 5.8 to 6.5 percent by 2027, which will lay the groundwork for achieving an 8 percent growth target by 2029.In the energy commodities sector, fiscal stability will be supported by the assumption that the price of Indonesian crude oil will be in the range of US$70 to US$95 per barrel. The target is to lift 602,000 to 615,000 barrels of crude oil per day and 934,000 to 977,000 barrels of gas equivalent per day.Furthermore, Prabowo emphasized that this exchange rate stability and economic growth are aimed at reducing the poverty rate to the range of 6.0 to 6.5 percent and lowering the open unemployment rate to the range of 4.3 to 4.87 percent.The Head of State presented the Macroeconomic and Fiscal Policy Framework (KEM-PPKF) of the 2027 State Budget in the DPR 19th Plenary Session, during the 5th Session of the 2025-2026 period. Prabowo is also the first Indonesian President to present the preliminary State Budget, which includes the macroeconomic and key fiscal policy framework, to the members of the DPR.The meeting was attended by 451 members of the DPR, which the House Speaker, Puan Maharani, declared a quorum. In this meeting, President Prabowo was accompanied by Vice President Gibran Rakabuming Raka, as well as the officials of the Red-and-White Cabinet. Also in attendance were Bank Indonesia Governor Perry Warjiyo, Chair of the Financial Services Authority's Board of Commissioners Friderica Widyasari Dewi, and Chair of the Deposit Insurance Corporation's Board of Commissioners Anggito Abimanyu.Read: Prabowo Targets 5.8%-6.5% Economic Growth in 2027Click here to get the latest news updates from Tempo on Google News
