Jakarta, Indonesia Sentinel — Indonesian President Prabowo Subianto has introduced an ambitious plan to slash government spending by approximately IDR 750 trillion (around $48 billion) through a three-phase strategy aimed at fostering long-term economic growth. The initiative of Indonesia budget cut is part of Prabowo’s broader vision for a more efficient and growth-oriented public sector.
The first phase of the plan, executed under Presidential Instruction (Inpres) No. 1 of 2025, has already achieved savings of IDR 306.69 trillion. This directive required both state and regional governments to adopt more efficient budget practices. “The first phase of cuts by the Ministry of Finance amounted to IDR 300 trillion,” Prabowo announced during the Gerindra Party’s 17th anniversary celebration on February 16, 2025.
The second phase of the plan sets an additional savings target of IDR 308 trillion. While the exact timeline for this phase remains unspecified, Prabowo emphasized that the primary focus will be on streamlining expenditures within government ministries and agencies. Notably, IDR 58 trillion of these savings will be reinvested into essential government functions to maintain operational stability.
The third and final phase of the cost-cutting initiative will target state-owned enterprises (SOEs). The government expects these enterprises to deliver IDR 300 trillion in dividends, with IDR 200 trillion allocated directly to the state budget and the remaining IDR 100 trillion reinvested to enhance SOE performance.
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Prabowo underscored the significance of allocating part of the savings toward social welfare, particularly child nutrition. “We cannot allow our children to go hungry while the wealthy eat well,” he stated, outlining plans to use approximately $24 billion to support child nutrition programs across the country. The remaining $20 billion will be channeled into long-term development initiatives through the state-owned entity Daya Anagata Nusantara (Danantara).
Prabowo’s budget cut plan reflects his administration’s commitment to prudent fiscal management while prioritizing social welfare and sustainable growth. As Indonesia navigates its path toward economic resilience, these strategic cuts aim to optimize government resources and improve citizens’ quality of life in the years ahead.
(Becky)
