Prabowo defends free meals as growth driver amid fiscal concerns

JAKARTA – President Prabowo Subianto has doubled down on his

signature free meals programme

, touting it as a vital engine for economic growth after Moody’s Ratings cut the country’s credit rating outlook over fiscal concerns.

Speaking in the capital, Mr Prabowo stated that the programme has boosted local economies and built a foundation for growth from the ground up. During the event, his Cabinet members presented plans to hundreds of investors and representatives from rating agencies to ease concerns about his spending policies.

Mr Prabowo said economic activities have increased in villages and districts, thanks to the programme, which has laid the foundation for a dynamic economy. “I believe that our economy will be very good this year,” he said. 

His remarks come as South-east Asia’s biggest economy grapples with restoring investor confidence. In January, an MSCI warning on poor market transparency triggered Indonesia’s worst two-day stock sell-off since 1998.

Since then, Moody’s lowered the country’s credit outlook to negative, and FTSE Russell postponed its March index review.

Mr Prabowo said that the meals programme now serves 60.2 million people, including students and pregnant women, while employing 1.5 million workers and supporting local supply chains. He dismissed fiscal concerns, explaining that the programme is funded by cutting wasteful spending amounting to hundreds of trillions of rupiah during his first year in office. 

“Money that would have been wasted on non-productive items, we shifted to productive programmes,” he said, adding that the government remained committed to fiscal discipline and efficiency.

During a forum, Mr Prabowo said the state wealth fund Danantara will strive for a 7 per cent return on assets. This signals expectations that the fund should play a more pivotal role in supporting state finances and national development as Indonesia manages tighter fiscal conditions. 

Mr Prabowo emphasised that Indonesia has never defaulted on its obligations, affirming his commitment to legal certainty and stability. To drive growth and restore market confidence, he said, he will build a clean, fair government under his “Indonesia Incorporated” strategy. BLOOMBERG