Indonesia’s 2027 budget positions miners, EV makers as winners

Bloomberg News | August 14, 2026 | 

Nickel Industries holds an 10% interest in the Huayue Nickel Cobalt HPAL project – HNC in Sulawesi, Indonesia. (Image courtesy of Huayou Cobalt.)

Miners, electric vehicle manufacturers, and battery producers are set to win big under Indonesia’s state budget next year, analysts said. The gains will be driven by President Prabowo Subianto’s push to boost the commodity sector and slash reliance on costly imported fossil fuels.

In his second annual budget speech on Friday, Prabowo set a deficit target of 2.4% of GDP for 2027, narrower than the expected 2.85% this year. He said that next year’s budget has been designed to be expansive, yet measured. The goal is to hit a 6% growth target while still working toward a balanced budget in the future.

“Overall I thought the budget was positive for the market, more importantly, no real negative surprises,” said Mohit Mirpuri, a partner at SGMC Capital Pte. “The 2.4% deficit target is reassuring and keeps fiscal discipline intact, which was probably the biggest thing investors were worried about going into today,” he added.

The Jakarta Composite Index of shares closed 1.6% higher on Friday to the highest in a week, led by gains in the energy and basic materials sectors. The rupiah added 0.3% while the 10-year government bond yield slid four basis points to its lowest in over a month.

Global investors have been closely watching Prabowo’s fiscal strategy for clues on his broader policy direction. Confidence in the nation’s financial assets was shaken by a widening budget deficit and signs of tightening state control over businesses, which triggered notable capital outflows. 

Market anxieties have been compounded by MSCI Inc.’s warning of a potential market status downgrade, lingering geopolitical conflicts in the Middle East, and shifting expectations for further interest hikes by the US Federal Reserve later this year.

Here’s a look at the potential winners and losers of Indonesia’s 2026 budget:

Winners

Ongoing reforms to combat illegal mining and improve export-data transparency would support commodity stocks, said Henry Wibowo, director and co-founder of Alphagate Capital in Jakarta. Clarity that a state export body will only monitor exports rather than control them has helped ease regulatory concerns. Miners that might benefit include PT Timah, PT Aneka Tambang and PT Bumi Resources

Electric vehicle and battery manufacturers are poised to outperform as the government drives industry growth with incentives targeting 1 million domestically produced electric motorcycles. This policy is expected to buoy companies such as PT Indika Energy, PT Vktr Teknologi Mobilitas, PT TBS Energi Utama and PT Merdeka Battery Materials.

“The headline numbers, like the deficit and revenue figures, look restrained. While some assumptions like growth or FX appear a bit ambitious, they’re not completely unrealistic,” said Galvin Chia, an emerging Asia strategist at Société Générale. “We think this should support the rupiah and Indonesian government bonds at the margin, pricing out residual policy risk premium,” he added.

A continued push for energy self-sufficiency bodes well for palm oil and renewable energy firms, according to Mirpuri. Key palm oil players include PT Astra Agro Lestari, PT Eagle High Plantations, PT Salim Ivomas Pratama and PT Sinar Mas Agro Resources and Technology. Meanwhile, prominent firms operating in the renewables sector include PT Barito Renewables Energy, PT Pertamina Geothermal Energy and PT TBS Energi Utama.

Major lenders like PT Bank Central Asia, PT Bank Negara Indonesia and PT Bank Mandiri, are set to benefit from the anticipated recovery in foreign capital inflows and stronger economic growth next year.

Construction and cement companies could see a significant boost from the government’s flagship project to build a 575-kilometer giant sea wall along Indonesia’s northern coast. Key builders in this space include PT Adhi Karya, PT PP and PT Wijaya Karya Beton while cement makers include PT Semen Indonesia and PT Indocement Tunggal Prakarsa.

Losers

While coal producers like PT Bumi Resources, PT Adaro Andalan and state-owned PT Bukit Asam have mostly been spared from Prabowo’s most interventionist natural resource policies — such as production curbs and steeply higher royalties — efforts to control prices through a new Strategic Mineral and Commodity Exchange could negatively impact their overseas sales.

Prabowo’s aggressive plan to consolidate and force profitability across state-owned enterprises (SOEs) is bound to hit weaker or poorly managed firms. Several prominent SOEs currently engulfed in deep financial and debt restructuring issues face severe pressure, including PT Wijaya Karya, PT Waskita Karya, PT Krakatau Steel and PT Indofarma.

(By Prima Wirayani and Benjamin Liu)