Jakarta. US tariffs, the sovereign wealth fund Danantara, and the blunt Finance Minister Purbaya Yudhi Sadewa have turned 2025 into quite an eventful year for Indonesia’s economy.

US President Donald Trump’s tariff hikes have sent countries across the globe into panic mode. President Prabowo Subianto is banking on Danantara to bump up growth and investment inflows. Investors and ministries have been keeping a close eye on Purbaya since his cabinet debut in early September. As we are only less than 24 hours away from 2026, here are some of the economic surprises that struck Indonesia throughout this year.

New Character Unlocked: Danantara

Danantara officially came to life in February as Indonesia’s second sovereign wealth fund after INA, and quickly climbed to the top of Prabowo’s economic agenda. The agency oversees all Indonesian state-owned enterprises, including the country’s largest banks and oil giant Pertamina, with assets totaling around $1 trillion.

“Danantara is set to be one of the world’s largest sovereign funds. … This is a solution that is not only strategic but also efficient in optimizing our state enterprises. We are not only investing the dividends in growth-creating industries, but we’ll turn our state enterprises into global leaders in their respective fields,” Prabowo said when he unveiled the fund in February.

Within its first year, Danantara had set up a $4 billion joint fund with Qatar Investment Authority to co-invest in industrial processing and other strategic sectors. Prabowo has allowed foreigners to take leadership roles at state enterprises, starting with the flag carrier Garuda Indonesia. Danantara’s boss Rosan Roeslani admitted that he would keep the international recruitment option open for other companies, although this is still subject to review. The fund also once made headlines when it issued “patriot bonds” at below-market yields to raise up to Rp 50 trillion ($3 billion) from the country’s wealthiest tycoons. 

And now Danantara is about to step into 2026 with a long to-do list.

The fund has stepped in to resolve the mounting Chinese debt that had derailed the $7.3 billion Jakarta-Bandung high-speed train project. Danantara is leading Prabowo’s ambition of constructing a Hajj Village for Indonesian pilgrims in Mecca, with up to $2 billion worth of investment in the pipeline. The agency has just signed a $500 million conditional purchase to acquire hotel and land plots close to Masjid al-Haram.

The freshly minted body has spent the past few months preparing the nationwide waste-to-energy project, which has gained traction among Chinese investors. Danantara also seeks to trim the number of state enterprises, from the current 1,000 to just above 200, for greater efficiency.

Surviving Trump Tariff Wrath

In early April, Trump unveiled a policy that kept Indonesian government officials and businesspeople awake during the Eid holidays: the “Liberation Day tariffs”. Trump wants to liberate his country from goods trade deficits, which neared $18 billion with Indonesia last year, US data showed. The import duty rates on Southeast Asia’s biggest economy have evolved over the past nine months as the negotiations progress.

The American politician originally intended to slap 32% tariffs on Indonesian goods, but later dropped the rate to 19% after a phone call with Prabowo. Jakarta promised to let American goods enter its market at zero tariff, on top of $15 billion energy purchases. The tariff scare has prompted the resource-rich Indonesia to give Trump access to its critical minerals, which Washington needs for automotives and arms production. 

"We made a deal with Indonesia. I spoke to their really great president, very popular, very strong, smart. ... We have full access to Indonesia, everything. As you know, Indonesia is very strong on copper. ... We will pay no tariffs. So they are giving access into Indonesia, which we have never had," Trump said, commenting on the deal back in July.

Prabowo's chief negotiator Airlangga Hartarto has traveled to Washington a couple of times to convince the Trump administration to grant more concessions.  His recent trip saw the US agreeing to eliminate the import tax on Indonesian palm oil.

But Trump's protectionism has brought the world closer as countries rush to sign their trade deals. Jakarta finally wrapped up the negotiations for a long-awaited trade agreement with the European Union after almost a decade of talks. The year is also about to end with more trade pacts for Indonesia, be it with the Moscow-led Eurasian Economic Union, Canada, and Peru, respectively.

Sri Mulyani's Successor

Prabowo’s giant cabinet said goodbye to the long-serving Finance Minister Sri Mulyani in September, following nationwide protests over economic inequalities. The well-respected woman had assumed the role for a total of 13 years, and Purbaya is facing expectations to see whether he can turn things around. His first economic move was to inject Rp 200 trillion ($12 billion) into state lenders to jumpstart lending. The money had come from state funds once parked at the central bank.

At one point, Purbaya was mulling slashing the money allotted for Prabowo’s brainchild, the nationwide free meal rollout, as the program’s spending remains sluggish. As of Dec. 15, the meal rollout had spent about 74.6% of the entire Rp 71 trillion ($4.2 billion) budget, totaling Rp 52.9 trillion. Purbaya even threatened to freeze Customs if they fail to improve their performance amidst mounting smuggling of illegal goods. 

The combination of early economic moves and a no-nonsense communication style has caused Purbaya’s fame to skyrocket, even making him a possible vice president candidate for 2029. Purbaya claimed he had no interest in the elections, citing that he was only getting started with his ministerial tenure. 

“It has only been a month. You are crazy,” Purbaya told reporters in October, when asked if the veep seat ever crossed his mind.

More surprises await Indonesia in 2026. The tariff talks are still ongoing, although Prabowo is set to head to Washington by end-January to sign the trade agreement. Danantara is set to remain at the center of Prabowo’s attention. And only time will tell what Purbaya’s next breakthroughs will be.

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