Indonesia has presented its 2025 budget plan, targeting a narrower deficit and maintaining a prudent fiscal approach. The proposed budget, valued at IDR 3,613.1 trillion ($230 billion), reflects a fiscal deficit of 2.53% of GDP for 2025, down from this year’s estimated 2.7%. This budget, developed under outgoing President Joko Widodo’s administration and the incoming team of president-elect Prabowo Subianto, outlines a commitment to fiscal stability while pursuing economic growth.
President Jokowi emphasized the importance of structural reforms and collaboration between fiscal, monetary, and finance policies. His goal is to uphold a credible fiscal policy while positioning Indonesia as a resilient and attractive investment destination.
Despite earlier concerns, the budget suggests that the new administration will remain fiscally responsible. Investors were initially worried about potential increases in the debt-to-GDP ratio, but the proposed budget mitigates these concerns. “This proposal signals fiscal prudence, countering fears of rising deficits,” said Handy Yunianto, head of fixed income at Mandiri Sekuritas.
Indonesia’s public debt-to-GDP ratio stands at 39%, well below the legal ceiling of 60%, ensuring that the country remains within safe limits. Meanwhile, the government has forecast GDP growth of 5.2% for 2025, in line with this year’s expectations. Inflation is projected at 2.5%, maintaining stability within the central bank’s target range.
Among the key highlights of the budget is a substantial allocation of IDR 71 trillion for Prabowo’s “Free Nutritious Meals” program. This initiative aims to tackle poverty and child stunting by delivering targeted support to the most vulnerable regions. The budget also sets aside IDR 400.3 trillion for infrastructure development, including projects related to Indonesia’s new capital city.
The new administration has proposed reforms to Indonesia’s energy subsidy policy, focusing on more efficient and targeted distribution to individuals in need, moving away from blanket subsidies.
As Indonesia navigates this transition period, the 2025 budget proposal underscores the importance of economic stability, responsible governance, and strategic investment in the country’s future.
If you’re looking to invest in Indonesia’s growing property market, now is the perfect time. The economic policies set for 2025 are designed to ensure stable growth and strong returns. Discover exclusive villas, land plots, and prime developments across Bali by visiting Harcourts Purba Bali. Contact us today to explore opportunities that align with Indonesia’s future growth.
Source: Reuters
Images: Google, Antara, Detik
