Indonesia may widen fiscal deficit to fund free school lunch, document shows

February 26, 2024

Indonesia may have to widen its budget deficit to fund a multi-billion-dollar free school lunch programme promised by likely new president Prabowo Subianto, showed a briefing document seen by Reuters on Sunday. The document, prepared by the coordinating ministry for economic affairs, showed the programme could widen the budget deficit by as much as 0.33% of gross domestic product (GDP) in 2025 if introduced across the world's third-biggest democracy. The calculations assumed a 2025 budget deficit of less than 2.5% of GDP, and 2025 economic growth of 5.3% to 5.6%, the document showed. For comparison, the fiscal deficit for 2024 has been set at 2.29% of GDP, while the economic growth target is 5.2%. Prabowo's campaign team has said the programme will initially require up to 120 trillion rupiah, before reaching 450 trillion rupiah when nationwide coverage is achieved in 2029.

The source of this news is from Tuoi Tre News

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