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flag Indonesia’s new loan rules allow central government funding for development, targeting national programs and defense, while limiting debt to keep deficit below 3% of GDP.

flag Indonesia has launched new rules enabling the central government to lend funds to local governments and state-owned enterprises for national development, requiring parliamentary approval, strong financial health, and repayment terms over 12 months. flag The move follows a 20% cut to 2026 regional autonomy funds to 693 trillion rupiah, redirecting resources to a nationwide free meal program for 83 million children and pregnant women and increased defense spending. flag Loans may incur fines for late repayment, and local leaders warn reduced funding could lead to tax hikes and public unrest, while the government aims to keep its fiscal deficit under the 3% GDP limit.

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