Indonesia to reallocate 44 billion USD from budget savings
Indonesian President Prabowo Subianto announced that the country’s budget efficiency measures will continue in three phases, targeting total savings of 750 trillion IDR (44 billion USD).
Indonesian President Prabowo Subianto (Photo: bloomberg.com)
Jakarta (VNA) – Indonesian President Prabowo Subianto announced that the country’s budget efficiency measures will continue in three phases, targeting total savings of 750 trillion IDR (44 billion USD).
Speaking at the 17th anniversary celebration of the Gerindra Party at Sentul International Convention Centre (SICC), Prabowo outlined the government’s fiscal strategy. In the first phase, the Ministry of Finance successfully saved government spending by 300 trillion IDR. The second phase aims for another 308 trillion IDR in savings.
However, 58 trillion IDR from the second phase will be reallocated to ministries and government agencies, effectively reducing the net savings to 250 trillion IDR.
He said that by 2025, state-owned enterprises (SOEs) are expected to generate 300 trillion IDR in dividends, with the government utilising 200 trillion IDR. In total, the country will have 750 trillion IDR.
A portion of the savings will fund the Free Nutritious Meals (MBG) programme, which has an estimated budget of 375 trillion IDR (around 24 billion USD) through 2029.
Additionally, the government plans to channel the remaining 375 trillion IDR, or approximately 20 billion USD, into Danantara, the state-owned investment superholding set to launch on February 24.
Reports showed that Danantara would manage assets of SOEs, including banks Mandiri and BNI, state utility PLN, oil and gas company Pertamina, mining giant MIND ID, and telecommunications company Telkom.
Minister of Finance Sri Mulyani Indrawati recently reaffirmed that Indonesia’s 2026 state budget will continue the cost-cutting measures implemented in 2025. The current budget has already been trimmed by 306.69 trillion IDR, affecting ministry allocations and regional transfers.
While maintaining fiscal discipline, Sri Mulyani assured that public services and social spending, including social assistance programmes, will remain protected. The Finance Ministry will conduct a comprehensive review of all government agencies to ensure compliance with efficiency measures while upholding constitutional obligations./.
The current state budget could only cover repairs for around 20,000 schools in Indonesia. To address this, funds previously earmarked for official travel abroad will be reallocated to support school renovations.
The Indonesian Ministry of Public Works faces a significant budget cut of 80% in 2025 to 29.57 trillion IDR from 110.95 trillion IDR (6.6 billion USD) in 2024.
Indonesia's Finance Minister Sri Mulyani Indrawati has announced an increase in the budget for the Free Nutritious Meal Programme (MBG) to 100 trillion Rp (5.9 billion USD).
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