TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Brutal budget cuts ‘preferable’ to increased debt
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
President Prabowo Subianto (right), in his capacity as chairman of the Gerindra Party, delivers a speech on the 17th anniversary of the party at Sentul International Convention Center in Bogor, West Java, on Feb. 15, 2025. (Antara/Hafidz Mubarak A)
T
he government’s massive budget cuts to fund the free meals program and shower the sovereign wealth fund with cash has garnered a mixed reception from economists, who say the cuts may be overly drastic but still preferable to issuing more debt.
President Prabowo Subianto said in a speech on Saturday marking the anniversary of his Gerindra Party that the budget cuts amounting to Rp 750 trillion (US$45.91 billion) were for the benefit of the people, even if some were protesting against them.
“We want betterment; that’s usually opposed by those who dislike good, but we’ll be successful, because we’re on the right side. We’re for the people. The people understand,” said the President.
The fiscal consolidation is to be implemented in three phases, with the first amounting to Rp 300 trillion ($18.4 billion) taken from a discretionary fund set aside in the 2025 state budget for unforeseen events.
The second phase concluded only last week based on a presidential instruction issued on Jan. 23 requiring all ministries and state agencies to identify spending items that could be cut to raise about Rp 306 trillion.
After dozens of work meetings between government institutions and House of Representatives commissions last week, the sides agreed to reduce the overall cuts to Rp 250 trillion and spread the burden across a greater number of institutions.
Some meetings also concluded that future wiggle room could be discussed.
