Luhut Optimistic on 8% Growth Despite Heavy MBG Costs

National Economic Council Chairperson Luhut Binsar Pandjaitan expressed confidence that the targeted 8 to 9 percent economic growth remains within reach over time. His optimism stems from state projects channeling up to Rp1 trillion per day from the central government directly down to the grassroots level.

"So, over time, through deregulation, efficiency, and curbing corruption, that 8-9 percent growth will be achieved," he said following a seminar at his office in Jakarta on Monday, May 25, 2026.

These massive daily expenditures of around Rp1 trillion include the Free Nutritious Meal (MBG) program, a government priority that continues to draw public scrutiny. Luhut views these initiatives as catalysts for economic expansion, pointing to the 5.61 percent growth rate recorded in the first quarter of 2026.

Despite the heavy cost of the MBG program, Luhut remains certain that the State Budget (APBN) deficit will be capped below 3 percent this year, following a 2.92 percent deficit throughout 2025.

Deputy Finance Minister Suahasil Nazara affirmed that the government will maintain fiscal credibility by managing the APBN adaptively to match shifting economic realities. Last year, the administration rolled out four economic stimulus packages for the public while successfully keeping the budget deficit under the 3 percent ceiling.

"The reality is that Indonesia offers a strong proposition through its adaptive and flexible management of the APBN," he said at the same event.

Aside from the MBG program, Suahasil noted that the state budget is being heavily deployed for other flagship programs, including the Red and White Cooperative, People's School, model schools, and healthcare infrastructure. These budgetary allocations are also coordinated with the National Creative Economy and Financial Investment Management Agency (Danantara) as an investment partner for key state projects.

"We are confident that growth will be achieved the 8 percent mark, in line with President Prabowo's target for his administration," he stated.

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