Budget allocations for the free nutritious meal (MBG) program now dominate the education budget. A school feeding program that does not fundamentally serve a core educational purpose has instead become a primary focus within the government’s education spending framework. This shift raises significant questions about fiscal priorities and the long-term health of the nation’s pedagogical infrastructure.

The closure of the Strait of Hormuz amid the escalating Middle East war has disrupted global oil and gas shipments, driving up prices and exposing Indonesia to serious energy and financial risks. Around 25 percent of the country's oil imports originate from the Middle East and pass through the strait, while domestic fuel reserves can only last for around 20 days. With oil prices recently surpassing US$100 per barrel and the rupiah weakening to around Rp 17,000 per United States dollar, Indonesia now faces an additional layer of economic and energy security risk. The administration of President Prabowo Subianto is therefore under pressure to secure alternative supplies and stabilize domestic markets.

The Agriculture Ministry is targeting investment in large-scale cattle farms with a population of up to 200,000 heads of cattle in Central Kalimantan Province, which would bedeveloped within an integrated business ecosystem to strengthen the national meat supply sustainably.

The Bengkulu Provincial Government continues to accelerate the development of the Baai Island Port Industrial Estate as a new center of economic growth on the west coast of Sumatra Island. These efforts were discussed during a meeting between Bengkulu Deputy Governor Mian and PT Pelindo President Director Achmad Muctasor at Pelindo Tower in North Jakarta Administrative City, Jakarta Special Capital Region on Mar. 5, 2026.

Fitch Ratings recently revised Indonesia’s sovereign outlook from stable to negative, although it maintained the country’s BBB investment-grade rating. Fitch highlighted global geopolitical tensions and President Prabowo Subianto ’s free nutritious meal program as potential fiscal risks. While the government insists the massive free meals budget will remain and promises to maintain fiscal discipline, questions arise over whether fiscal policy is being designed primarily for economic stability and public welfare, or whether it is driven by political considerations.

Indonesia faces rising inflation during the Ramadan season every year, but inflationary pressures this year have been compounded by the government’s free nutritious meal program, pushing annual inflation to 4.76 percent. The situation may worsen as the ongoing United States-Israel war on Iran pushes up global commodity prices, particularly oil and gas, which could further fuel inflation in Indonesia.

Indonesia’s sovereign wealth fund Daya Anagata Nusantara (Danantara) marked its first anniversary in February 2026 with plans to invest US$26 billion in downstream projects, equivalent to 1.7 percent of gross domestic product. While the scale is significant, questions remain about its broader economic impact amid limited state-owned enterprise (SOE) reforms and uncertainty over the implementation of its investment plans.