Indonesia to reduce spending by $18.84bn

January 24, 2025 (MLN): Indonesia's President Prabowo Subianto has instructed his government to cut spending by 306.7 trillion rupiah ($18.8 billion) this year, a finance ministry spokesperson told Reuters on Thursday.

Prabowo has frequently highlighted the need for efficient spending under his administration.

The cuts are equivalent to about 8% of the total approved spending this year of 3,621.3tr rupiah, according to Reuters.

Spokesperson Deni Surjantoro said the cuts do not entail a revision to the state budget for 2025, which would require approval from the parliament, adding ministries and agencies would identify areas to cut.

Prabowo issued the formal presidential instruction in a document released this week, local media reported.

He instructed his cabinet on Wednesday to halve costs on ceremonies and business trips, Reuters further added.

Indonesia has allocated 71tr rupiah this year for Prabowo's flagship program to provide free meals for up to 17.5 million people, which began earlier this month.

But Prabowo wanted to expand the recipients this year to its full scale at 82.5mn, or more than a quarter of the population, by the end of the year.

That would require an additional 100tr rupiah in the budget, said the head of the agency overseeing the program last week.

Some economists have warned the additional debt to fund it could hurt the country's hard-won reputation for fiscal prudence, Reuters noted.

The finance ministry has previously projected 2025's budget deficit at 2.53% of Indonesia's gross domestic product.

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