Economist Warns Indonesia's 2025 Budget Deficit Could Widen Due to Free Meal Program

TEMPO.CO, Jakarta - Samuel Sekuritas Indonesia's senior economist, Fithra Faisal Hastiadi, has cautioned that President Prabowo Subianto's priority program for providing free nutritious meals could significantly widen Indonesia's 2025 budget deficit. Fithra projects the deficit could exceed the target by IDR 200 trillion.

The government initially planned a fiscal deficit of 2.53% of gross domestic product (GDP), equivalent to IDR 616.2 trillion. However, Fithra predicts the deficit may reach 2.9% of GDP. “This means the fiscal deficit next year might not be IDR 600 trillion, but potentially as high as IDR 800 trillion,” he stated during an online seminar broadcasted on RSM Indonesia's YouTube channel on Friday, January 17, 2025.

Program Cost Concerns

Fithra referred to an Organization for Economic Cooperation and Development (OECD) projection, which estimates that spending on the free nutritious meals program will exceed the allocated IDR 71 trillion in 2025.

According to the OECD’s Economic Surveys: Indonesia 2024, published in November 2024, the primary challenges in implementing the program are logistics for nationwide food distribution and funding. The report estimates that the program will cost USD 4.3 billion (approximately IDR 70.4 trillion) under the 2025 budget. However, expenses could surge to USD 30 billion (around IDR 491.1 trillion), representing a 14% increase over the government’s current budget.

Calls for Additional Funding

Dadan Hindayana, Head of the National Nutrition Agency (BGN), has recommended an additional IDR 100 trillion allocation to meet the target number of beneficiaries by the end of 2025.

“We propose an additional IDR 100 trillion to provide meals for all 82.9 million beneficiaries,” Dadan said after a closed meeting led by President Prabowo at the Presidential Palace in Jakarta on Friday, January 17, 2025, as reported by Antara News Agency.

Currently, the program’s allocated budget of IDR 71 trillion under the 2025 state budget is insufficient to cover all targeted recipients. The program, a key component of Prabowo’s campaign, allocates IDR 10,000 per child and pregnant woman daily, down from the previous allocation of IDR 15,000. Based on BGN calculations, this reduced budget will only benefit 17.5 million recipients through September 2025.

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