Free meals programme sparks Indonesia's consumption boost

Indonesia's president said that the country's economic growth is real and will this year surpass its target, adding that business players have acknowledged the benefits of his free meals programme in boosting consumption.

- 

Workers cook at a tofu factory in Jakarta

(Reuters)

Prabowo Subianto's speech at an economic forum came after a period of turmoil triggered by a warning from index provider MSCI about stock market transparency as well as a cut in Indonesia's bond rating outlook by Moody's.

At the forum, attended by international agencies, Prabowo said his flagship programmes, including free meals and the development of village cooperatives and fishing villages, will boost the economy.

Prabowo said the free meals scheme has created jobs and increased the income of farmers, adding that despite a small number of food poisoning cases, the programme was a success after reaching more than 60 million recipients.

"I met with industry leaders... they told me that free meals have improved consumption," Prabowo said.

"We are not running a handout economy," he added.

At the same event, Indonesia's senior economic minister Airlangga Hartarto said the economy has the potential to grow by 5.68 this year, above the official target of 5.48, backed by projects launched by sovereign wealth fund Danantara Indonesia and the government.

Airlangga also said that market sentiment has improved, as shown by this week's rebound.