Indonesia fiscal policy

A perfect storm of domestic and international uncertainties has pushed the currency toward the all-time low set in mid-1998.

The Jakarta Stock Exchange Composite Index plunged more than 7 percent, forcing it to suspend trading for the first time since 2020.

To a large extent, fears about uncontrolled government spending have been overblown.

The last-minute shift by President Prabowo Subianto came in response to strong criticisms from business associations and labor unions.

Indonesia's incoming president has an ambitious economic plan, but his current approach may not be up to the task.

The former World Bank director will become the first person to hold the finance portfolio under three presidential administrations.

Here are the three main contenders to take the post when President-elect Prabowo Subianto takes office in October.

The president-elect plans to increase the country's debt-to-GDP ratio to 50 percent, up from 39 percent currently, in order to achieve his ambitious growth targets.

Prabowo's deficit-driven economic vision draws from that of his father Sumitro Djojohadikusumo, a key intellectual of the early post-independence period.

Despite the expenditures of the COVID-19 era, the country’s fiscal position and macroeconomic outlook are stable.

Coming after two years of pandemic-induced deficit spending, the budget assumes a strong return to growth and revenue potential in the years to come.

In 2022, the state intends to continue its robust spending on the areas most impacted by the COVID-19 pandemic: health and social assistance.