Summary
● The macroeconomic assumption of 5,2%1 in the preparation of the 2025 State Budget shows a less aggressive but realistic government target considering
the current weakening economic conditions.
● The government through Presidential Instruction 2 implemented a budget efficiency policy of IDR 306,69 trillion, consisting of IDR 256,1 trillion from the budget.
ministries/institutions and IDR 50,59 trillion from Transfers to Regions.
● Efficiency policies will influence changes in the structure of regional government revenue and expenditure, where currently regional governments are still...
has a significant dependence on transfer income.
● A decrease in government spending in several provinces that are highly dependent on the government administration sector has the potential to experience
slowing economic growth.
● In particular, several provinces with the highest risk profiles, both in terms of fiscal risk and economic risk, are Aceh Province, North Maluku, Southwest Papua, and South Papua.
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