Indonesia's State Spending Rises While Transfers to Bali Plunge

Indonesia's central government reported a 17.8% increase in state spending, reaching Rp1.656 trillion by the end of July 2026. Finance Minister Purbaya Yudhi Sadewa said the rise was driven by programs such as the free nutritious meals (MBG), the 13th‑month salary and holiday allowances for civil servants, infrastructure projects, and subsidies for fuel and electricity.

In contrast, the Ministry of Finance disclosed that transfers to Bali fell 7.06% in the first half of 2026, amounting to Rp5.61 trillion versus Rp6.04 trillion a year earlier. Supendi, head of the Bali Treasury Office, explained the decline was due to a lower budget ceiling, with sharp cuts of over 50% in three of the five transfer categories, including a 63.95% drop in the revenue‑sharing fund, a 62.97% reduction in special allocation funds, and a 51.76% fall in village funds.