Indonesia’s key parliamentary budget committee has approved a 6% rise in spending for the incoming administration of President-elect Prabowo Subianto.  

The approved budget for 2025 amounts to 3,621.31 trillion rupiah (approximately $236.2 billion), up from the estimated 3,412.2 trillion rupiah in 2024. This increase is aimed at supporting Prabowo’s initiatives, including free school meals, free health check-ups, hospital construction, school renovations, and food security programs. 

"The 2025 budget was designed to support an effective government transition," said Said Abdullah, the chair of the budget committee, during a parliamentary meeting. He added that these programs are essential to help meet Prabowo's target of lifting Indonesia’s economic growth to 8% from the current 5%. 

The budget also projects a fiscal deficit of 2.53% of GDP, slightly lower than this year’s outlook of 2.7%. Revenues are expected to rise by 7.2%, reaching 3,005.1 trillion rupiah in 2025.  

Prabowo has set a revenue target of 2,490.91 trillion rupiah from taxes, customs, and excises—an increase of 12.3% over the 2,218.4 trillion rupiah expected in 2024. Prabowo also plans to increase the country’s tax-to-GDP ratio from around 10% to 18% through the creation of a specialized state revenue agency. 

While the budget has been approved by the budget committee, a wider parliamentary vote scheduled for September 19 is still needed for final approval. However, this vote is typically a formality and expected to endorse the committee’s decision.  

Despite the approval, concerns have been raised by investors over the fiscal targets. They worry that Prabowo’s spending plans could result in the deficit widening beyond the projected 2.53%.  

"Prabowo's fiscal targets are too ambitious," according to a report by BMI, a unit of Fitch Solutions, which suggested that the deficit could expand to 2.8% or approach the legal ceiling of 3%. 

Prabowo’s maiden budget assumes that the economy will grow by 5.2% in 2025, slightly higher than the 5.1% forecast for 2024, while inflation is expected to remain steady at 2.5%.  

Prabowo is set to begin his five-year term on October 20, when he will oversee the implementation of the newly approved budget.