Indonesia’s Fiscal Policy Faces Test Under New Finance Minister

RRI.CO.ID, Jakarta - The change in Indonesia’s Finance Minister has not caused market turbulence. Instead, investors are waiting for clarity on fiscal direction as the government executes the 2026 State Budget and prepares the 2027 State Budget.

A professor at the School of Economics and Business at Airlangga University, Rahma Gafmi, said the appointment of Suahasil Nazara to replace Purbaya Yudhi Sadewa reinforces expectations of policy continuity.

“The leadership transition at the Finance Ministry from Purbaya Yudhi Sadewa to Suahasil Nazara has generally been met with relatively stable and positive sentiment. One might say reassuring,” Rahma said in a written statement in Jakarta on Monday, September 14, 2026, as quoted by Antara.

Minister Suahasil’s track record as Deputy Finance Minister since 2019 is seen as reducing the risk of a policy shock.

The market will now assess his ability to manage the deficit, maintain the credibility of the State Budget, and coordinate with Bank Indonesia (BI), the Financial Services Authority (OJK), the Deposit Insurance Corporation (LPS), the Committee for Financial System Stability (CFSS), and Danantara Indonesia.

Meanwhile, Permata Bank Chief Economist Josua Pardede said Suahasil’s experience ensures a relatively smooth transition in fiscal management.

“In general, I think the appointment of Suahasil Nazara as Finance Minister is positive and relatively reassuring in terms of policy continuity,” Josua said.

The immediate challenge is to ensure the 2026 State Budget is closed in a credible manner while testing the assumptions of the 2027 Draft State Budget.

In the provisional budget agreed upon by the government and the House of Representatives’ Budget Committee, government spending rose to IDR 4,106.3 trillion. The deficit was set at IDR 671.2 trillion, or 2.40 percent of GDP.

Josua said revenue strengthening should focus on broadening the tax base, improving compliance, streamlining administration, and closing loopholes. Investor confidence, he added, will depend on consistent fiscal discipline.

“Suahasil’s first step should not be bold new moves, but providing certainty. A Finance Minister’s credibility is determined not only by technical competence, but also by the willingness to reject programs that are too costly, unproductive, or pose unjustifiable fiscal risks,” Josua said.

President Prabowo Subianto swore in Suahasil Nazara on Monday, September 14, replacing Purbaya Yudhi Sadewa. Minsiter Suahasil previously served as Deputy Finance Minister and Head of the Fiscal Policy Agency at the Finance Ministry. ***