Fitch Flags MBG Burden, Airlangga: US$1 Investment Generates US$7

Airlangga Hartarto, Indonesia’s Coordinating Minister for Economic Affairs, responded to Fitch Ratings’ concerns about the Free Nutritious Meals Programme (MBG), which Fitch warns could pressure the fiscal position. Airlangga argues the programme is a long-term investment for Indonesia, citing international studies including the World Bank and the Rockefeller Foundation that show nutrition programmes can have significant economic impacts. He claimed that with widespread and well-executed rollout, MBG could deliver high returns: ‘an investment of US$1 for MBG can generate US$7 for the country.’ He emphasised that MBG is not merely government spending but a long-term investment pursued by many countries, including the United States, and that the policy challenges are long-term rather than short-term. Regarding Fitch’s assessment, Airlangga noted MBG is still in the early stages of implementation and will be rolled out gradually. Fitch Ratings previously projected a 2026 budget deficit of 2.9% of GDP, higher than the government’s target of 2.7%, driven partly by higher social spending including MBG, which Fitch estimated would absorb about 1.3% of GDP from 2025–2029. Fitch warned that increased social spending could raise the risk of fiscal deviation, while the government sees MBG as a growth-supporting and social-stability measure that, if well managed, aligns with both medium- and long-term objectives.