Rp 55 Trillion MBG Becomes Key to Maintaining Economic Growth

The government is relying on the expansion of social spending, particularly the Free Nutritious Meals (MBG) programme, as the main pillar to support public purchasing power while maintaining economic growth momentum amid global pressures. Finance Minister Purbaya Yudhi Sadewa stated that strengthening government spending is the primary strategy to boost domestic demand. “Government spending has also grown by 21 percent. This aligns with our strategy to even out spending throughout the year,” Purbaya said during the APBN KiTA Media Briefing at the Ministry of Finance office on Tuesday (5/5/2026). As of 31 March 2026, the realisation of the MBG programme has reached Rp 55.34 trillion, covering approximately 61.8 million recipients through more than 26,000 nutrition fulfilment service units (SPPG). On the other hand, the food security budget has also been realised at Rp 53.7 trillion, or around 25.5 percent of the Rp 210.4 trillion ceiling, encompassing fertiliser subsidies, support for Bulog, and food stabilisation interventions. This step is crucial given that household consumption remains the main pillar of the economy. Data shows consumption grew by 5.52 percent, contributing more than half to gross domestic product (GDP). Purbaya emphasised that strengthening consumption is key to maintaining growth amid global uncertainties, including commodity price pressures and a slowing world economy. “We are pushing demand so that the economy keeps moving,” he said. In line with this, Coordinating Minister for the Economy Airlangga Hartarto stated that the government will continue to rely on state spending as a support for growth, especially in the second quarter. “Government spending is a pillar, and this will also be a pillar in the second quarter,” he said. He added that pressure on the rupiah exchange rate is also influenced by rising demand for the US dollar, particularly during dividend payment periods and the Hajj season. Therefore, the government is preparing various mitigation measures, including currency swap cooperation with several countries. Amid these conditions, the effectiveness of social spending is a concern. With state spending growing by 31.4 percent up to March and the deficit kept at around 0.93 percent of GDP, the government faces the need to maintain a balance between fiscal expansion and budget sustainability. However, the government is optimistic that this strategy remains appropriate, given that domestic consumption is still the main engine of national economic growth. With a combination of the MBG programme, food spending, and various other stimuli, the government hopes that public purchasing power remains maintained and is able to withstand the impact of external slowdowns throughout 2026.