Indonesia's lunch project to add 2.6 pct points to GDP by 2029, says Prabowo aide

By Stefanno Sulaiman

JAKARTA (Reuters) - Indonesia's presumed incoming president Prabowo Subianto expects his signature programme to provide free school lunches will propel economic growth, a senior member of his party said on Wednesday, amid concerns over the plan's possible fiscal burdens.

Rahayu Saraswati Djojohadikusumo, Prabowo's Gerindra party deputy chair and his niece, said the 450 trillion rupiah ($28.67 billion) project to give nearly 83 million Indonesian students and pregnant women lunch will add 2.6 percentage points to economic growth when fully implemented by 2029.

Prabowo will start the programme in stages from 2025, benefiting an initial 24 million elementary school students, she said.

"Prabowo has believed for a long time that we really need this programme," she told Reuters in an interview.

Indonesia's economy grew 5.05% in 2023. Prabowo has predicted growth under his presidency could reach 8% within the next four to five years.

Some 48,000 kitchens will be set up to cook the meals, creating 2.5 million new jobs, Saraswati said, adding that sourcing ingredients from local farms was being considered to ensure equitable growth.

Economists and rating agencies have warned that Southeast Asia's largest economy may not have the fiscal space to fund the programme, which risked undermining its track record of fiscal discipline.

At an investment forum, Prabowo on Tuesday pledged to maintain the government's fiscal prudence.

Saraswati said several options to fund the programme were being considered that would put less burden on the state budget, such as by reducing state financing in non-core infrastructure projects and rearranging allocation from welfare programmes.

Prabowo, currently defence minister, declared victory in last month's presidential election after unofficial counts showed he won nearly 60% of votes ahead of the official announcement due by March 20. If confirmed the winner, Prabowo will take office in October.

($1 = 15,695.0000 rupiah)

(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Bernadette Baum)