(Bloomberg) -- Indonesia’s parliament approved a state budget that will help President-elect Prabowo Subianto get his administration and growth ambitions up and running next month.
Lawmakers passed the 2025 budget into law at a plenary meeting on Thursday, with state spending set at 3,621 trillion rupiah ($237 billion) to support an economic growth target of 5.2%. The outgoing President Joko Widodo set the budget shortfall at 2.53% of gross domestic product, narrowing from the 2.7% deficit estimated for this year.
Prabowo’s flagship programs — free nutritious meals, school renovations and national food security initiatives — are the centerpieces of next year’s budget. It should also provide more spending leeway for the new cabinet, which is expected to expand its total ministries and agencies.
“This deficit level is moderate and safe to accommodate the government’s transition period while maintaining the sustainability and health of the state budget,” Finance Minister Sri Mulyani Indrawati told lawmakers.
State revenue is estimated at 3,005 trillion rupiah in 2025, on the back of a 14% increase in tax collection from this year’s outlook. The oil target was also raised to 605,000 barrels per day to boost non-tax receipts and pare crude imports next year.
Still, factoring in external risks in the coming year, the government set a stronger assumption for the rupiah to average at 16,000 per US dollar, from an earlier estimate of 16,100. The currency has risen 7% in the past three months and was recently trading at 15,285 to the greenback.
The average bond yield target was also lowered to 7% from 7.1% previously.
(Adds comment from finance minister in fourth paragraph, currency in sixth.)
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