Minister of Finance Sri Mulyani Indrawati has ensured that budget efficiency policy imposed on ministries and government institutions will not hinder the national economic growth target this year, but can instead encourage economic growth to exceed the target set at 5.2 percent.

Sri Mulyani emphasized that budget efficiency through Presidential Instruction (Inpres) No. 1/2025 is not a cut in government spending, but rather a budget reallocation. 

"If the central government budget reallocation is carried out on activities that have the same multiplier effect as previous activities or greater, the impact on the economy will be better," Sri Mulyani told a media conference at the House of Representatives/People’s Consultative Assembly Complex in Jakarta on Friday, February 14, 2025.

In the 2025 State Budget (APBN), total state spending is set at Rp3,621 trillion (US$226,31 billion). Of that amount, central government spending is allocated at Rp2,701.4 trillion (US$166,22 billion), while transfers to regions and village funds at Rp919,9 trillion (US$56.55 billion).

The finance minister also ensured that her party will continue to monitor the implementation of Inpres No. 1/2025 to maintain bureaucratic efficiency. 

"This spirit is important for the implementation of a good and efficient bureaucracy," she cited.

Previously, President Prabowo Subianto instructed budget savings or efficiency of up to Rp306,69 trillion (US$18.83) to support priority government programs, including the free nutritious meal program. Of this amount, the budgets of ministries and institutions are cut by Rp256.1 trillion (US$15,75 billion), while transfers to regions are reduced by Rp50.59 trillion.

This budget efficiency covers various elements of government, including ministries, the Indonesian Military, the National Police, the Attorney General’s Office, heads of non-ministerial institutions, as well as offices of governors, regents, and mayors. 

This efficiency policy has an impact on the development of the Nusantara Capital City (IKN), the work scheme of the State Civil Servant (ASN), to the operation of ministry and institution buildings, such as electricity use.