Hardjuno: President Prabowo Faces Big Challenges In Managing Budget Deficits That Are Estimated To Reach IDR 616 Trillion

JAKARTA - Law observer and anti-corruption activist, Hardjuno Wiwoho assesses that President Prabowo Subianto's administration faces major challenges in managing a budget deficit that is projected to reach IDR 616 trillion by 2025.

This deficit is a direct impact of the aggressive fiscal policy carried out by the previous government, especially in the era of President Joko Widodo (Jokowi).

"This budget deficit is an accumulation of debt taken during President Jokowi's time to finance various strategic infrastructure projects. These projects have indeed succeeded in boosting economic growth in the short term, but the burden of debt financing must now be borne by the new government," said Hardjuno, quoted Friday, October 25.

Hardjuno explained, during the Jokowi administration, fiscal policies that tended to be expansive caused debt buildup. The toll road construction projects, airports, ports, and power plants that are worked on massively using financing schemes, most of which come from debt withdrawals.

"This debt provides benefits for infrastructure development, but its long-term effects are now felt in the form of a budget deficit," he added.

The 2025 State Revenue and Expenditure Budget (APBN), which was passed on October 17, 2024 -- three days before the government changed -- has estimated a budget deficit of IDR 616 trillion. Most of this deficit was closed through debt financing of IDR 775 trillion, which is a consequence of previous debt policies.

"This is not a policy that can be changed immediately. President Prabowo inherited a fiscal situation that is already full of debt pressure. Even though he started managing the budget in 2025, the policies made by the previous government still greatly influenced the space for new government fiscal movements," said Hardjuno.

However, Hardjuno is optimistic that the Prabowo government will take thorough steps in overcoming this situation. At the first cabinet meeting after being inaugurated, Prabowo emphasized the importance of more careful financial management, especially regarding the supervision of potential budget leaks and corruption.

"Teliti, that is what President Prabowo emphasized. He is committed to ensuring that the state budget is used effectively and on target, without leakage and without corruption," Hardjuno said, citing Prabowo's statement at the meeting.

In an effort to manage the inherited deficit and debt, the Prabowo government also emphasized the importance of strengthening state financial supervision. Prabowo emphasized that eradicating corruption and budget leakage is a top priority in his new government.

"The Prabowo Subianto administration has shown a strong commitment to conducting audits and strict supervision of every use of the budget. This is an important step to reduce the country's fiscal burden which is getting heavier due to old debts. Development programs will continue, but with strict supervision so that budget leakage does not occur," added Hardjuno.

According to Hardjuno, the Prabowo government must balance deficit financing with the need to maintain economic growth and protect the interests of the people. One of the steps that can be taken is to ensure that investment in the productive sector has a long-term impact on the national economy, while maintaining efficiency in state spending.

"By reducing the risk of corruption and budget leaks, as well as directing debt to productive sectors, I believe the Prabowo administration is able to better manage this deficit, even though the challenges inherited are quite heavy," he concluded.

Hardjuno suggested that the management of this deficit requires disciplined and careful fiscal policies, as well as structural reforms in debt management.

"The Prabowo government must focus more on efficiency and ensure that debt is used for the benefit of the people at large, not only to continue short-term projects," concluded Hardjuno.