Jakarta. The appointment of Suahasil Nazara as finance minister puts fiscal continuity back at the center of Indonesia’s economic policy, as the new minister faces pressure to contain the budget deficit, lift state revenue and preserve room for economic growth.

President Prabowo Subianto inaugurated Suahasil as finance minister at the State Palace in Jakarta on Monday, replacing Purbaya Yudhi Sadewa. Suahasil previously served as deputy finance minister.

The reshuffle marks the third change in the finance minister position under Prabowo’s administration.

Rosdiana Sijabat, professor of business economics and vice rector for innovation, research, cooperation and alumni at Atma Jaya Catholic University, said the frequent changes could pose challenges to policy continuity.

“Having three finance ministers in less than three years is unusual and shows that economic management requires policy consistency. The economy cannot be managed through trial and error, so changes in leadership must still be accompanied by continuity in policy direction,” Rosdiana said in a statement Wednesday.

Still, she said the positive market response to Suahasil’s appointment could support expectations for a more predictable fiscal policy direction.

Rosdiana attributed the response partly to Suahasil’s long experience at the Finance Ministry. He previously headed the Fiscal Policy Agency and served as deputy finance minister under Sri Mulyani Indrawati, giving him experience in managing the state budget, or APBN.

“A prudent fiscal approach is likely one of the things appreciated by the market. Amid current fiscal pressures, the challenge is not simply to pursue aggressive policies, but to maintain fiscal prudence while creating room to support economic growth,” she said.

Rosdiana said Suahasil’s immediate challenge would be maintaining fiscal discipline as pressure builds on the APBN. She pointed to the risk of the budget deficit approaching the 3% of gross domestic product (GDP) threshold, while state revenue remains constrained by Indonesia’s relatively low tax capacity.

The government also faces challenges in meeting its 2026 tax revenue target as spending needs remain high.

“Debt burdens and large government financing needs are also challenges, as they can create fiscal crowding out and narrow financing space for the private sector,” Rosdiana said.

External and geopolitical uncertainty could add further pressure, particularly through movements in global oil prices that could increase the cost of energy subsidies.

“If conditions like this occur, pressure on our fiscal position will certainly increase,” she said.

Against those pressures, Rosdiana said Suahasil’s experience could help strengthen fiscal management and coordination with monetary policy.

“The hope is that Mr. Suahasil can bring back prudence and discipline in fiscal policy while still giving the government room to gradually support economic growth,” she said.

The appointment, Rosdiana said, does not by itself resolve Indonesia’s fiscal challenges, but Suahasil’s familiarity with the APBN could help strengthen coordination between fiscal and monetary policy.

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