Speaking at the 17th anniversary celebration of the Gerindra Party at Sentul International Convention Center (SICC) on Saturday (15/2/25,) President Prabowo Subianto outlined the government’s fiscal strategy and announced that Indonesia’s budget efficiency measures will continue in three phases, targeting total savings of IDR 750 trillion (approximately USD 44 billion), according to reporting from Jakarta Globe.
“In the first phase, the Finance Ministry successfully saved government spending by IDR 300 trillion. The second phase aims for another IDR 308 trillion in savings,” Prabowo said.
However, IDR 58 trillion from the second phase will be reallocated to ministries and government agencies, effectively reducing the net savings to IDR 250 trillion.
By 2025, state-owned enterprises (SOEs) are expected to generate IDR 300 trillion in dividends, with the government utilizing IDR 200 trillion. “In total, we will have IDR 750 trillion,” Prabowo added.
Jakarta Globe reports that a portion of the savings will fund the Free Nutritious Meals (MBG) program, which has an estimated budget of IDR 375 trillion (around USD 24 billion) through the end of his administration. Prabowo emphasized that addressing child nutrition remains a priority.
Additionally, the government plans to channel the remaining IDR 375 trillion, or approximately USD 20 billion, funds into Danantara, the state-owned investment super holding 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, according to Jakarta Globe.
Finance Minister 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 IDR 306.69 trillion, affecting ministry allocations and regional transfers.
While maintaining fiscal discipline, Sri Mulyani assured that public services and social spending, including social assistance programs, 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.
Source: Jakarta Globe
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