Indonesia’s Free School Meals Program Aims to Boost GDP Growth by 2 Percentage Points

TEMPO.CO, Jakarta – Indonesia has approved an additional budget of 100 trillion rupiah (US$6.14 billion) for its ambitious free school meals program. A top aide to President Prabowo Subianto reveals this move aims to significantly contribute to the country’s economic growth.

Program Expansion and Its Impact

Launched at the beginning of January, Prabowo’s signature initiative, initially targeting 17.5 million beneficiaries at a cost of 71 trillion rupiah, is being scaled up. With the new budget, the program’s scope is extending to serve nearly 83 million people by year-end, a remarkable milestone given Indonesia’s total population of approximately 276 million.

The additional funding is expected to boost Indonesia’s GDP by nearly 2 percentage points, surpassing the nation’s growth target of 5.2%. This economic impact stems from increased spending within the community and enhanced productivity among recipients, especially school-aged children.

Public Approval and Fiscal Considerations

The free meals program has garnered significant public support, earning President Prabowo Subianto an approval rating of nearly 81% in a recent poll. This impressive endorsement reflects positive sentiments towards the administration’s efforts to alleviate poverty and improve educational outcomes.

However, financial markets remain cautious about the program’s cost implications, wary that increased borrowing could jeopardize Indonesia’s reputation for managing its finances prudently.

Funding Mechanism and Other Projects

President Prabowo has responded by instructing his government to make spending cuts, amounting to 306.7 trillion rupiah (about 8% of the year’s total budget). This measure ensures the additional expenditure for free meals does not further exacerbate existing debt levels.

Prabowo’s administration is also exploring innovative financing methods for other key initiatives. Funding for the plan to construct 3 million affordable homes annually can be met by issuing housing bonds and leveraging state-owned banks to offer mortgages with longer repayment terms, up to 30 years.

REUTERS

Editor’s Choice: Indonesia Aims for Cleaner Energy with New Nuclear Power Plants

Discover Indonesia’s Plans for New Nuclear Power Plants with 4.3 GW Capacity

Click here to get the latest news updates from Tempo on Google News

We encourage you to stay updated with the latest developments in Indonesia’s social and economic landscape. Your thoughts and insights are valuable to our community. Please share your comments below and consider subscribing to our newsletter for exclusive content.