Indonesia's Bold Free Meal Initiative: A Catalyst for Economic Growth

Indonesia's government plans an additional 100 trillion rupiah for a free meals program for school children, increasing economic growth. Initially set for 71 trillion rupiah, it aims to reach 83 million children, boosting President Prabowo's approval, but financial markets worry about its impact on fiscal prudence.

Indonesia is set to allocate an additional 100 trillion rupiah ($6.14 billion) towards its free meals program for school children, a move expected to add nearly 2 percentage points to the nation's economic growth, an aide to President Prabowo Subianto announced on Friday.

The program, initiated earlier this month, originally aimed to benefit 17.5 million individuals this year at a cost of 71 trillion rupiah ($4.36 billion). The nation's GDP growth target stands at 5.2%. President Prabowo has now agreed to increase the budget to 171 trillion rupiah, with hopes of reaching 83 million children by year-end.

However, financial markets have expressed concern over the program's cost, warning it could affect Indonesia's reputation for fiscal prudence. The additional funding will come from a spending cut of 306.7 trillion rupiah, ordered by Prabowo, representing about 8% of this year's total approved budget.

(With inputs from agencies.)