To Curb State Budget Deficit, CORE Economist: Budget Reallocation for Priority Programmes Possible
JAKARTA, KOMPAS.com - Economist from the Center of Reform on Economics (CORE) Yusuf Rendy Manilet believes that delaying or reallocating the budget for government priority programmes could be one option to curb the state budget deficit, especially amid geopolitical pressures and the potential for energy price spikes.
According to him, the government’s strategic programmes have large budget allocations, which can be utilised as fiscal space when the government requires additional spending, particularly for energy subsidies.
“Of course, especially since strategic programmes have large allocations. As an illustration, the MBG and KDMP programmes have a total budget allocation this year of around Rp400 trillion, which is substantial enough to be bypassed in government mitigation policies, such as budget efficiency,” Yusuf told Kompas.com on Monday (13/4/2026).
“For example, if the government reallocates half of that total budget, it could be used to increase subsidy funding that can be utilised if oil prices rise and the government needs additional budget,” he explained.
Nevertheless, Yusuf notes that the government has actually begun implementing efficiency measures on priority programmes, including the Free Nutritious Meals (MBG) programme, although the scale remains limited.
“Actually, looking at the government’s initial mitigation, MBG has already been included in one of the spending aspects that has been made more efficient. However, it is still limited to reducing the number of meal distribution days,” he said.
He assesses that this efficiency step is not yet significant enough, while on the other hand, priority programmes are still absorbing large amounts of budget.
“It’s not substantial enough yet, and indeed, amid the efficiency process being carried out by the government, this programme appears to be very massive in its spending,” he stated.
Yusuf emphasises that in conditions of increasing fiscal pressure due to geopolitical conflicts, the government needs to be more firm in including strategic programmes in the list of spending that can be evaluated or delayed.
“This is because the government has increasingly thin budget space if pressure through geopolitical conflicts intensifies,” he said.
He adds that such steps are important to keep the deficit under control amid high global uncertainties.
Previously, the failure of peace negotiations between the United States and Iran in Pakistan on Saturday (11/4/2026) has posed a major dilemma for US President Donald Trump.
According to a South China Morning Post report, Trump faces a difficult choice: to continue military strikes or to hold back.
If the US resumes escalating military action, that step could potentially face domestic opposition, especially ahead of the midterm elections.