Indonesia is eyeing up to 80 trillion rupiah ($4.7 billion) in savings to cushion its economy from the fallout of the war in the Middle East, according to the government.
Southeast Asia’s largest economy is also considering fuel-saving measures, including one day of remote work per week for government and certain public-sector workers, as US-Israeli strikes on Iran and Tehran’s retaliatory response in the Gulf have sent global oil prices soaring.
In an interview recorded last week, President Prabowo Subianto was asked about a possible shift in the country’s budget priorities, which heavily subsidise fuel for its population of just over 284 million.
The former general said the government was “making every effort” to cut costs by curbing energy consumption and boosting production of renewables, mainly solar power.
During the interview, presidential spokesman Prasetyo Hadi suggested the government is seeking savings of 80 trillion rupiah — a number confirmed to AFP by the presidency on Monday.
Prasetyo did not detail where the money would come from.
The government has repeatedly insisted Prabowo’s signature free meals program — budgeted at $19.7 billion for 2026 — will remain untouched.
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It has also so far staunchly defended its fuel subsidy, which covers about 30 to 40 per cent of the cost for consumers and represents around 15 per cent of the budget.
These form part of Prabowo’s goal to raise the economic growth rate from 5.1 per cent last year to eight per cent by 2029, fuelled by public spending.
Unlike many of its neighbours, Southeast Asia’s biggest economy has not yet seen long fuel queues as global oil prices have soared.
“There are still many other cost-saving measures that we can implement,” Prabowo said in an interview with journalists and experts aired by local media over the weekend.
The government will finalise its work-from-home policy and announce it to the public “as soon as possible”, Prasetyo said Saturday.
AFP
