Jakarta. The National Economic Council (DEN) has urged President Prabowo Subianto to tighten spending efficiency, including in the government's flagship Free Nutritious Meals (MBG) program, as rupiah weakness and global economic uncertainty threaten inflation and household purchasing power.

DEN member Chatib Basri said fiscal discipline is essential to maintaining economic stability and investor confidence amid growing external pressures. He stressed that efficiency measures should also apply to priority programs with large budget allocations, including MBG.

"Measures to improve spending efficiency should also cover the MBG program," Chatib said after a meeting with President Prabowo at the Merdeka Palace in Jakarta on Tuesday.

His remarks come as the government has revised the MBG budget for 2026, cutting allocations by Rp 67 trillion ($3.73 billion) as part of broader fiscal efficiency efforts. The program's budget ceiling was reduced from Rp 335 trillion to Rp 268 trillion.

In addition to the budget reduction, the government is optimizing implementation by adjusting food distribution and meal-service schemes, which are expected to generate additional savings of around Rp 20 trillion.

"We also conveyed that one of the key issues requiring attention is the risk of rising prices resulting from rupiah depreciation. This would particularly affect lower- and middle-income households," Chatib said.

According to him, a weaker rupiah could increase the cost of imported goods, production inputs, and distribution, potentially pushing up prices across a range of consumer products. He said the government should anticipate the secondary effects of currency depreciation to prevent higher inflation and weaker household consumption.

Despite the efficiency drive, the MBG program continues to expand rapidly and remains a major contributor to government spending growth in the 2026 state budget.

Deputy Finance Minister Suahasil Nazara previously estimated that the MBG program was absorbing around Rp 19 trillion in state funds each month during its initial phase.

"Spending in January and February reached around Rp 39 trillion. Even without MBG, government goods spending would still have increased. Non-MBG goods spending rose from Rp 18 trillion in 2025 to Rp 28.6 trillion in 2026. The rollout of MBG has accelerated that increase," Suahasil said on March 11.

As of March 9, the program had reached 61.62 million beneficiaries through 25,082 MBG kitchens (SPPG). Budget realization stood at Rp 44 trillion, equivalent to 13.1% of the then-approved allocation of Rp 335 trillion.

The expansion has continued. By the end of May, MBG budget realization had reached Rp 88.15 trillion, up 17.53% from Rp 75 trillion recorded at the end of April.

Finance Minister Purbaya Yudhi Sadewa said the spending had supported 63.13 million beneficiaries through 29,679 operational SPPG units nationwide.

Meanwhile, DEN member Mochammad Firman Hidayat said Indonesia's economy remains resilient despite global uncertainty and geopolitical tensions.

"Our economic fundamentals are very strong, far stronger than during the 1998 crisis. Various macroeconomic indicators show that the national economy remains solid and is nowhere near a crisis," Firman said.

He pointed to Indonesia's 5.61% year-on-year economic growth in the first quarter of 2026 and annual inflation of 3.08% in May as evidence of the economy's resilience.

However, Firman cautioned that prolonged global conflicts and continued rupiah weakness could increase production and distribution costs, eventually feeding into domestic prices.

"This is something that must be anticipated in the second half of the year, although I believe the government has already prepared the necessary measures. Amid this global uncertainty, maintaining confidence remains crucial," he said.

The meeting between President Prabowo and the National Economic Council is part of the government's efforts to monitor economic developments and formulate policy responses to preserve fiscal stability, control inflation, and protect household purchasing power.

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