Insight

Fuel Subsidy Cuts Hit Middle Class

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Algo Research Team


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Key Summary:


  • Another round of subsidy cuts
  • Subsidy tepat program
  • Impact on middle class

The Indonesian government plans to reduce fuel subsidies to alleviate pressure on limited fiscal budget. This shift is expected to impact both the middle class and broader economic growth, as fuel price could rise and subsidy allocations shift.


Fuel subsidies in 2024: The government has allocated IDR 186.9 trillion for energy subsidies, whereby IDR 113.3 trillion is placed for fuel and LPG, which has put pressure on state budget.


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