Government budget for infrastructure Indonesia 2015-2024

As of 2024, the Indonesian government had allocated over 423 trillion Indonesian rupiah for infrastructure. This indicated a sharp increase of over eight percent from the previous year and over 65 percent compared to 2015. Over the past few years, the Indonesian government has focused on intensive infrastructure development across the archipelago to increase connectivity. This has been one of the leading factors in the positive growth of Indonesia's construction industry.

Construction in Indonesia

Indonesia’s construction sector has seen uptrends in recent years, with over 1.5 quadrillion Indonesian rupiah worth of completed construction works in 2022. As one of the country’s largest GDP contributors, this sector thrives due to increased infrastructure development. Notably, regional variations in construction activity exist across the diverse archipelago. Due to more intensive development, provinces on Java Island lead in construction activities, with higher GRDP values from construction. Meanwhile, other regions, like provinces on Papua Island, have more challenging geographical conditions and limited distribution channels, resulting in significantly higher construction cost index scores.

National priorities for infrastructure: building toward equality

Notable increases in the government’s infrastructure budget are driven by ambitious objectives. Historically centered on Java Island, where Jakarta is located, infrastructure development efforts now aim to reduce regional disparities across the archipelago. To foster this goal and accelerate economic growth, the government has prioritized a list of strategic initiatives with high urgency to be expedited. Among these prioritized projects is the development of Nusantara, a new city in East Kalimantan, to replace Jakarta as Indonesia’s capital.