Minister of Finance Sri Mulyani Indrawati has disclosed that only Rp5 trillion (US$308 million) of the Rp71 trillion allocated for Indonesia’s Free Nutritious Meals (MBG) program has been spent as of the end of June 2025 − just 7 percent of the annual state budget allocation for the program, a key initiative of President Prabowo Subianto.

“In this case, only 7 percent of the Rp71 trillion in our APBN (State Budget) has been spent,” Sri Mulyani said during a hearing with the House of Representatives’ Budget Committee on Monday, July 1, 2025.

With that spending, the government has reached 5.58 million beneficiaries and established 1,863 community kitchens, or Nutritional Service Units (SPPGs), as of June 30, 2025. However, she emphasized that significant challenges remain for the second half of 2025, as the President targets 82.9 million beneficiaries and 30,000 kitchens nationwide.

According to Sri Mulyani, the Rp71 trillion budget may realistically only cover meals for 15.5 million schoolchildren and 2.4 million pregnant women. The current achievement falls short of the 17.9 million targeted for the first phase.

“The President still expects the Free Nutritious Meals program to reach 82.9 million and 30,000 SPPGs. So this will be a major challenge in the second semester,” she added.

Fiscal warnings

Meanwhile, the ASEAN+3 Macroeconomic Research Office (AMRO) has flagged concerns over the rising fiscal deficit, largely attributed to increased government spending on President Prabowo’s ambitious programs, including MBG.

“The fiscal deficit may widen further in 2025 due to increased spending associated with new priority programs,” AMRO said in its 2025 Annual Consultation Report, released on Tuesday, June 24, 2025.

While the government initially capped the 2025 deficit at 2.3 percent of GDP, AMRO projects it will continue to expand. Much of the fiscal pressure stems from stimulus-driven spending and acceleration of strategic infrastructure projects.

Compounding the issue, the government’s decision to scrap the planned increase in the VAT rate to 12 percent, applying it only to luxury goods, has curtailed potential revenue growth.

APBN at a glance

As of May 2025, the State Budget (APBN) recorded a Rp21 trillion deficit, equivalent to 0.09 percent of GDP − a sharp turnaround from the Rp4.3 trillion surplus recorded in the previous month. However, Sri Mulyani reassured lawmakers the current figure remains within safe limits.

“The total deficit target for 2025 is Rp612 trillion, so Rp21 trillion is still very small,” she said on June 20, 2025.

Revenue collection has reached Rp995.3 trillion, or 33.1 percent of the annual Rp3,005.1 trillion target. Of this, tax revenues contributed Rp806.2 trillion (32.4 percent), while non-tax revenues (PNBP) amounted to Rp188.7 trillion (36.7 percent).

Government spending stood at Rp1,016.3 trillion, representing 28.1 percent of the Rp3,621.3 trillion budget ceiling. This includes Rp694.2 trillion in central government expenditure and Rp322 trillion in transfers to regions (TKD), which have achieved 35 percent realization.

Despite the deficit, the government still posted a primary balance surplus of Rp192.1 trillion, up from Rp173.9 trillion in April − a sign of ongoing fiscal stability amid growing programmatic demands.