A well-intentioned budget
Facing tumbling approval ratings and economic pushback, President Prabowo Subianto pivots to fiscal discipline in his latest budget—but delivering on his ambitious promises will be the real test.
In his latest budget proposal, President Prabowo Subianto has shifted his focus to fiscal responsibility, aiming to achieve a budget deficit of 2.4 percent of gross domestic product (GDP) for the coming year. This move comes after his previous budget address saw a decline in approval ratings, prompting criticism over regional funding cuts and leadership changes at key economic institutions such as the Finance Ministry, the Financial Services Authority (OJK), and Bank Indonesia.
The President's emphasis now lies on structural priorities, including optimizing the assets of state-owned enterprises through public-private partnerships, establishing a domestic electric motorcycle ecosystem to boost industrial development, and constructing 100 gigawatts of solar power capacity to advance the country's energy transition.
These measures represent a marked departure from last year's budget, which prioritized defense spending and controversial programs like the free nutritious meal initiative and Red and White Village Cooperatives, both of which faced scrutiny for corruption and food safety issues.
The government has also capped the allocation for free meals at Rp 240 trillion (US$13.5 billion) for the following year, a significant reduction from the initial Rp 335 trillion proposed. While this represents a significant improvement, the government must now prove that it can maintain fiscal discipline and carry out these initiatives without risking the stability of the macroeconomy amid global geopolitical uncertainties.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
