Indonesia aspires to become a high-income country by 2045 while pursuing a green, resilient and inclusive development model. The 2025–2029 National Medium-Term Development Plan (RPJMN) sets out this trajectory, emphasizing poverty reduction, human capital development, productivity gains and sustained, high-quality growth. Over the past two decades, Indonesia has made remarkable social and economic progress: real GDP growth averaged approximately 5 percent annually between 2015 and 2025, and the national poverty rate fell from 19 percent in 2000 to 8 percent in 2025. Progress has nevertheless become uneven, with significant spatial disparities between rural and urban areas. The Government has set ambitious targets, including annual growth of 8 percent, reducing poverty to 5 percent by 2029 and eliminating extreme poverty by 2027. Meeting these goals will require more effective and better-targeted public spending, supported by sound policies and institutions.

Several institutional reforms in public financial management (PFM) have been implemented to improve the quality of public expenditure. The Redesign of the Planning and Budgeting System, which took effect in 2021, simplified the structure of technical programs and introduced a new program nomenclature, accelerating the implementation of program-based budgeting. Other reforms have included the modernization of budget preparation and execution processes, the integration of previously off-budget activities into the budget, the strengthening of internal audit capacity, and improvements in public procurement policies and practices.

Nevertheless, further reforms are needed to consolidate core PFM functions. Deviations between annual plans and approved budgets in strategic sectors such as transport and health point to the need for better alignment between planning and budgeting; the public investment efficiency gap remains larger than in other emerging markets, partly due to weaknesses in public investment management; and budget account classifications between the central and subnational governments remain insufficiently harmonized.

Indonesia also has a long-standing commitment to gender equality in public policy, with gender mainstreaming as a government-wide mandate and gender-responsive budgeting progressively introduced into planning and budgeting processes. A first assessment of gender responsive PFM was conducted in 2020.

The assessment is led by the World Bank Task Team Leader (TTL), who retains overall responsibility for coordinating and managing the assessment, in partnership with the Ministry of Finance. It is funded through the multi-donor trust fund for PFM (PFM-MDTF) supported by Switzerland, the European Union and Canada, as well as by Australia, and is carried out by a World Bank task team working together with a Government task team. Development partners, including the PFM-MDTF donors, Australia, the Agence Française de Développement (AFD) and the Asian Development Bank, will be invited to contribute to the main stages of the assessment (launch, technical workshops, review meetings and peer review).

AFD contributes to the assessment by financing, through the PEFA Technical Assistance Facility implemented by Expertise France, the mobilization of a senior PEFA expert. In this context, Expertise France is recruiting a senior PEFA expert to support the assessment across the PEFA framework, working closely and collaboratively with the World Bank and Government task teams throughout the process.