Jakarta. Experts doubt that the newly appointed Finance Minister Suahasil Nazara will bring radical shifts to how Indonesia manages its state money, unless he dares to make changes.

In a surprise reshuffle, President Prabowo Subianto removed Finance Minister Purbaya Yudhi Sadewa from the cabinet on Monday, about a year after the latter marked his first anniversary in the post. His deputy minister Suahasil got promoted.

Bank Danamon’s chief economist Irman Faiz views the changes as a “signal of fiscal continuity rather than a shift in Indonesia’s fiscal regime”. Suahasil had been the deputy finance minister since 2019. His long-standing role at the ministry is expected to limit transition risk. 

“[Suahasil’s] technocratic background provides institutional continuity for state budget management. The key challenge ahead is balancing the government’s ambitious growth agenda with increasingly constrained fiscal space,” Faiz said. 

Indonesia aims to grow by 6% in 2027, while keeping the fiscal deficit within around 2.40% of the gross domestic product (GDP). Bank Danamon forecasts modest 5.1% growth, while expecting the budget shortfall to be 2.75% of GDP. However, this will require the Prabowo administration to reprioritize “lower-multiplier spending toward more productive expenditure”.

Speaking to the Jakarta Globe, UPN Veteran Jakarta economist Achmad Nur Hidayat wondered if the shake-up would lead to changes in fiscal policies. Given Suahasil’s “non-newcomer status”, he should possess an insider’s understanding of the state budget, taxation, subsidies, and fiscal governance.

“But this is where his biggest test lies.[Suahasil] is not an external technocrat who is here to fix an old system. He is part of the system. That’s why the public has the right to demand more than bureaucratic stability,” Achmad said.

“[Suahasil] must be brave enough to fix the policies that he himself has also helped manage.”

Senior economist Bhima Yudhistira advised Suahasil against being a “yes man”. Bhima has been critical of Indonesia’s overspending on Prabowo’s cost-heavy free meal program, which has caused countless students to fall sick. This program of feeding school kids every day catapulted Prabowo into his 2024 election victory, which is why the government is going all out with the spending.

“Suahasil must step in to make budget efficiencies on Prabowo’s flagship programs,” Bhima said.

Shortly after his inauguration, Suahasil admitted that Prabowo had instructed him to "maintain the credibility of the state budget."

"The deficit shall remain under the [legislated] 3% [of the GDP limit]," Suahasil promised.

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