Government Capital Expenditure Budget Reduced in the 2025 State Budget

Capital expenditure is a budget allocation for the acquisition of assets that can provide benefits for more than one accounting period. This expenditure includes the purchase of land, buildings, equipment, and intangible assets.

The 2025 State Revenue and Expenditure Budget (RAPBN) draft mentions that capital expenditure is one of the government's spending focuses aimed at supporting growth and accelerating economic transformation.

"The strengthening of capital expenditure continues to be carried out in order to provide an optimal multiplier effect on economic growth and improved welfare," as quoted from the 2025 RAPBN Financial Note.

Nevertheless, the government's capital expenditure budget for next year is recorded as decreasing.

Based on the RAPBN, the allocation of central government capital expenditure in 2025 is valued at Rp190.64 trillion, equivalent to 7.08% of its total expenditure budget of Rp2.69 quadrillion.

This is a 23% decrease compared to the capital expenditure allocation in 2024, which reached Rp247.47 trillion, and the lowest since 2021.

Previously, in 2022 and 2023, the realization of government capital expenditure exceeded its budget allocation, as shown in the graph.