Indonesia’s Spending Cuts

JAKARTA (Reuters) – Indonesia’s President Prabowo Subianto has instructed his government to cut spending by 306.7 trillion rupiah ($18.8 billion) this year, according to a finance ministry spokesperson.

Prabowo has frequently emphasized the need for efficient spending under his administration. The cuts, which represent about 8% of the total approved spending this year of 3,621.3 trillion rupiah, do not require a revision to the 2025 state budget, as said by spokesperson Deni Surjantoro. Ministries and agencies will identify specific areas to reduce costs.

The formal presidential instruction was issued in a document released this week, with Prabowo instructing his cabinet to halve costs on ceremonies and business trips.

Indonesia has allocated 71 trillion rupiah this year for Prabowo’s flagship program, aimed at providing free meals for up to 17.5 million people, which started earlier this month. Prabowo intends to expand this program’s reach to 82.5 million by the end of the year, which would require an additional 100 trillion rupiah in the budget, as stated by the agency overseeing the program.

Economists have expressed concerns that additional debt to fund the expansion could jeopardize Indonesia’s reputation for fiscal prudence. The finance ministry has previously projected 2025’s budget deficit at 2.53% of Indonesia’s GDP.

($1 = 16,275.0000 rupiah)