Thekabarnews.com – The Indonesian National Nutrition Agency (BGN) denied social media reports that the Free Meals (MBG) program would be stopped from June 5, 2026, because of the lack of operational funds. Additionally, the information circulating is false and unofficial.

The clarification comes amid a growing public debate over the long-term fiscal sustainability of one of the nation’s biggest social welfare programs.

The government says the program is on track. However, economists have become increasingly concerned about the size of the budget needed to support the nationwide initiative. They worry about its possible impact on Indonesia’s fiscal position, currency stability, and financial markets.

Bhima Yudhistira Adhinegara, executive director of the Center of Economic and Law Studies (CELIOS), said a temporary halt of the program could be beneficial for the broader economy. This is because it could be evaluated comprehensively.

“I think it could be good for the Indonesian economy if we temporarily suspend the MBG program. Then, conduct a comprehensive review of it,” said Bhima, as cited in SUARACOM.

“The budget that is getting bigger fast without reviewing the program could put more pressure on the State Budget (APBN),” he said.

“The continuous growth of nutrition service kitchens and rising operational costs could be a drain on government finances in the long run,” he added.

Bhima said that if the government keeps pouring a big budget into MBG without a moratorium, and at the same time increases the kitchens, the economic impact could be contractionary.

“Financial markets look beyond the short-term political developments,” Bhima said.

Investors are closely watching Indonesia’s medium- to long-term fiscal outlook. This includes the state budget deficit and public debt levels, he said.

“It’s not all about market sentiment. Investors are also closely watching the widening fiscal deficit and rising government debt burden,” he added.

“Stronger fiscal discipline will increase investor confidence, strengthen the rupiah, and reduce imported inflation,” Bhima said.

“If the rupiah continues to appreciate, it will ease the pressure on consumer prices. This effect happens through the higher import costs,” he said.

A stronger dollar may also lower costs of production for industries that import large amounts of raw materials.

Bhima also pointed to potential problems beyond fiscal issues for Indonesia’s food supply chain.

The MBG program needs huge amounts of rice, vegetables, eggs, meat, milk, and other agricultural products every day.

He said large-scale procurement could divert supplies away from traditional markets. This is because big producers and distributors may prefer to take government orders.

“The MBG program uses huge amounts of raw materials, and large-scale farmers and distributors provide much of it,” he said.

He cautioned that higher institutional demand could lead to less food in open markets. This could drive up retail food prices and contribute to inflationary pressures.

Lower supplies on the market could eventually make food pricier for traders and consumers. “Or in other words, inflation risks may increase,” Bhima added.

The MBG program remains one of President Prabowo Subianto’s priority programs. It aims to improve nutrition, health outcomes, and educational performance among Indonesian children and other vulnerable groups.

Bhima emphasizes the need to balance social goals with prudent fiscal management and macroeconomic stability.

Bhima concluded that a rigorous policy evaluation would help ensure the program remains economically sustainable and minimize unintended economic consequences.

“Revisiting the initiative does not mean that we are going to abandon its goals. Instead, we will strengthen its implementation to protect public welfare and Indonesia’s long-term economic resilience,” President Prabowo said.

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