Jayanty Nada Shofa, Jakarta – Indonesia does not plan on cutting a slice out of its multibillion-dollar free meal budget, according to a senior minister, as the government seeks to keep its deficit in check by avoiding wasteful spending.
As the protracted Iran-Israel war sends oil prices surging, the Indonesian government is putting its thinking cap on to make sure that it doesn't have to revise the 3% deficit limit. Indonesia has been trying to maintain a strict fiscal discipline so that its budget shortfall does not exceed the 3% of the gross domestic product (GDP).
However, the Indonesian government has stated it would only consider breaching the limit when push comes to shove. In the meantime, Jakarta will cut back on spending, but the Rp 335 trillion (around $19.8 billion) earmarked for the free meal program will be untouched.
"The [budget] for the government's leading programs will remain the same because they [the free meals] are long-term investments," Chief Economic Affairs Minister Airlangga Hartarto told a press briefing in Jakarta on Monday.
The kids' meals were President Prabowo Subianto's flagship campaign promise. The program sees the archipelagic Indonesia trying to feed 82 million kids and expectant mothers daily nutritious meals to spur the economy and combat stunting. As the lunch money is off-limits, Indonesia will target cuts to other funding.
"There are different ways. We can target spending related to services, business trips, and equipment. Each ministry also has programs that we can take a look at," Airlangga said.
For Indonesia, any decision hinges on how long the Middle East conflict will drag on. The economic tsar said that they had braced for scenarios where the war could last for five months, six months, and ten months.
Earlier that day, Finance Minister Purbaya Yudhi Sadewa had said that Indonesia "could make the free meal spending more efficient", while praising how the school lunches had been helpful for kids from poorer households.
The no-nonsense official went on to say that the program's full-year budget "does not have to be Rp 335 trillion", signaling his openness to make changes. On the other hand, Dadan Hindayana, who heads the agency overseeing the meal distribution, said that there would not be revisions to the budget "for the time being".
Talks of austerity measures and deficit scenarios came out after global oil prices topped $100 a barrel as the Iran war keeps the strategic Strait of Hormuz paralyzed. For Indonesia, the worst-case scenario assumes a crude oil price of $115 per barrel and the rupiah trading at Rp 17,500 per dollar. This combination can bring the budget shortfall to swell to 4.06% of GDP.
Government data showed Indonesia had spent around Rp 44 trillion (approximately $2.6 billion) to dish out the nutritious meals across the archipelago by the end of February. This is only 13.1% of the entire program budget for 2026 alone. Last year, Indonesia's deficit had already neared its statutory cap, reaching 2.92% of the GDP.