Jakarta. The Indonesian government has designated Rp 525 trillion ($33.45 billion) for subsidies and compensation in the 2025 Draft State Budget (APBN), according to Finance Minister Sri Mulyani Indrawati. The budget will be split between energy subsidies and compensation and non-energy subsidies.

Energy subsidies and compensation will receive Rp 394.3 trillion, a 17.8 percent increase from the Rp 334.8 trillion allocated in 2024. This funding will support subsidies for 3-kilogram LPG canisters, diesel fuel, and kerosene, as well as electricity for low-income households and an equitable energy transition.

Non-energy subsidies are allocated Rp 131.3 trillion, up 35.5 percent from this year's Rp 96.9 trillion. These funds will enhance food security, including a subsidy for up to 9 million tons of fertilizer, and assist low-income families in acquiring homes with a target of accelerating the construction of 1 million homes. “New targets may be set by the incoming administration,” Sri Mulyani noted.

Additionally, non-energy subsidies will ease credit access for micro, small, and medium enterprises (MSMEs), farmers, and fishermen, and provide tax incentives for businesses.

The 2025 State Budget deficit is projected at 2.53 percent, amounting to Rp 616.2 trillion, with state revenue estimated at Rp 2,996.9 trillion and expenditure set at Rp 3,613.1 trillion.

Outgoing President Joko "Jokowi" Widodo has proposed a total government budget of Rp 3,613.1 trillion for 2025, marking the first year of his successor Prabowo Subianto's administration. Of this, Rp 2,693.2 trillion will be allocated to central government expenditure, while Rp 919.9 trillion will be transferred to sub-national governments to address regional disparities.

Key allocations include Rp 722.6 trillion for education, Rp 197.8 trillion for health, Rp 400.3 trillion for infrastructure, Rp 124.4 trillion for food security, and Rp 504.7 trillion for social protection.

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