Purbaya’s Thankless Task
Purbaya Yudhi Sadewa steps into the role of Indonesia’s new finance minister at a challenging time, tasked with navigating a 2026 budget already constrained by President Prabowo Subianto’s flagship programs while needing to boost tax revenues by 13.5% without rate hikes and cut the fiscal deficit to 2.48% of GDP. To balance growth and stability, Purbaya has pledged to accelerate state spending and proposed shifting Rp 200 trillion in state savings to commercial banks to spur private sector activity, a move welcomed by investors but not without risks. Replacing the widely respected Sri Mulyani Indrawati, Purbaya brings technocratic credentials rather than global credibility, and while his bluntness may help him call out policy shortcomings, success will depend on his ability to temper ambition with fiscal realism. Ultimately, his challenge lies in maintaining market confidence while steering economic transformation, holding the balance between continuity and change in Indonesia’s fiscal policymaking.