Authors:
Hadi Prayitno, Wayan SudiraDoctoral
The central government is strengthening fiscal centralization through changes to the structure of the 2025 and 2026 State Budgets (APBN). Central Government Expenditure rises from IDR 2,701.4 trillion to IDR 3,149.7 trillion, while Transfers to Regions (TKD) fall from IDR 919.9 trillion to IDR 693.0 trillion. Village Funds (DD) also decline from IDR 71.0 trillion to IDR 60.57 trillion. In the 2026 APBN, Central Government Expenditure accounts for around 82 percent of total state expenditure, leaving Transfers to Regions at approximately 18 percent. This shift narrows regional fiscal space even as regional governments retain substantial responsibilities for basic services.
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