Purbaya States Free Nutritious Meal Programme Will Not Burden Fiscal Position
Finance Minister Purbaya Yudhi Sadewa has ensured that the government’s priority programmes, including the Free Nutritious Meal (MBG) and the Merah Putih Village/Sub-district Cooperative (KDKMP), will not exert pressure on the national fiscal condition. This is due to the fact that the budgetary schemes for these programmes are designed to be flexible.
Purbaya emphasised that the flexible design of these programmes allows the government to make adjustments based on economic conditions and budget availability. This statement simultaneously dispels concerns regarding budget rigidity for these strategic programmes.
“The initial assumption was that MBG and others were not flexible. I informed S&P that these can be adjusted. Therefore, there is no need to fear our fiscal condition. Everything can be monitored, managed, and controlled,” said Perdapat, as reported by Antara on Saturday (6/6).
The Finance Minister explained that international rating agencies, such as S&P Global, do not essentially raise issues regarding Indonesia’s fiscal fundamentals in relation to these programmes. According to him, the focus of international agencies is more directed towards market sentiment dynamics rather than the national economic foundation.
“When I last met with S&P, they did not actually make an issue of it. They only focused on sentiment, questioning or worrying about negative sentiment in the market; that is all. But as for the foundations, there is no problem,” he added.
The government is committed to maintaining the budget deficit within a safe limit, specifically in the range of 2% to 3% of Gross Domestic Product (GDP). Purbaya is optimistic that this figure can be maintained even as various priority programmes are implemented simultaneously.
Furthermore, he guaranteed that the government possesses control mechanisms in the event of external shocks, such as a rise in global oil prices. “If, for instance, global oil prices rise significantly, it can be controlled as required,” he concluded.
Finance Minister Purbaya Yudhi Sadewa also noted that the weakening of the Jakarta Composite Index (IHSG) and the Rupiah was triggered by negative perceptions rather than Indonesia’s economic fundamentals. He acknowledged, however, that the weakening of the Rupiah exchange rate has impacted the payment of foreign-denominated government debt interest.