Simulating the Impact of the Free Nutritious Meal Program on Household Income Growth: A Social Accounting Matrix Approach

Abstract

The Free Nutritious Meal Program (MBG) is one of the flagship initiatives of the Prabowo Gibran administration, designed to stimulate the local economy. However, the program faces a major challenge due to its high fiscal cost, which forces the government to reduce spending in other sectors. This study examines the net impact of MBG on household income growth after accounting for such budget cuts. The analysis employs the 2022 Social Accounting Matrix (65×65) and evaluates eight scenarios of positive and negative injections. The results show that without budget cuts, MBG contributes to economic growth of up to 5.01%, while household income rises by 4.95 to 5.17%. When budget cuts occur, household income contracts between 0.1 and 0.6%. The simulation reveals a consistent pattern where income growth is higher when more MBG funds are allocated to Sector A. Based on these results, three recommendations are proposed. First, adjust the total MBG budget to avoid excessive reductions in other sectors. Second, prioritize allocations to Agriculture, Forestry, and Fisheries to reduce income contraction and stabilize food prices. Third, ensure transparency in MBG budget implementation to prevent corruption