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Resty Woro Yuniar

Indonesian President Prabowo Subianto abruptly removed Finance Minister Purbaya Yudhi Sadewa on Monday after just over a year in the job, turning to veteran ministry technocrat Suahasil Nazara as his government grapples with mounting fiscal pressure and questions over economic policy coordination.
Suahasil, who had served as deputy finance minister since 2019, becomes Prabowo’s third finance minister in less than two years, following Purbaya and his internationally respected predecessor Sri Mulyani Indrawati.
No official reason was given for Purbaya’s removal, which came after a tenure marked by an aggressive push for faster economic growth and, more recently public friction over government finances and the management of state funds.
The surprise nature of the reshuffle was underscored by Purbaya’s movements on Monday: he had been attending a parliamentary hearing when he left after receiving a phone call, shortly before Suahasil was sworn in at the presidential palace.
“The priority is to run a credible state budget,” Suahasil said after taking office. He said Prabowo had instructed him to safeguard the health and credibility of state finances while pledging to keep the fiscal deficit below Indonesia’s statutory ceiling of 3 per cent of GDP.
He also sought to portray his appointment as continuity rather than a sharp policy shift, pointing to his long tenure inside the finance ministry.

Analysts said Suahasil’s extensive experience inside the finance ministry could help steady policy after a turbulent period.
“To help restore market confidence and stabilise macro-fiscal management, President Prabowo finally made the decision to appoint Suahasil Nazara, an experienced internal fiscal expert, amid growing frictions over revenue targets, state budget implementation, and policy coordination – including debates over state fund transfers and contributions from Danantara,” said Harry Su, managing director at brokerage Samuel Sekuritas Indonesia.
One of the most visible disagreements in Purbaya’s final weeks concerned state investment fund Danantara Indonesia.
Purbaya said late last month that Danantara would contribute about 120 trillion rupiah (US$6.8 billion) to the state budget this year, describing the payment as a decision by Prabowo and saying the funds could provide an additional fiscal buffer as the government sought to contain its deficit.
But Danantara chief executive Rosan Roeslani subsequently said the institution had not internally discussed such a 120 trillion rupiah payment, contradicting Purbaya’s account of the proposed payment.
Bhima Yudhistira, executive director of the Centre of Economic and Law Studies, said Danantara had mounted “strong protests” over the finance ministry’s proposal.
“Purbaya’s internal coordination methods, including his communication style, have been deteriorating over time. He was also overconfident. That’s what led to his reshuffle,” Bhima said, although the presidential palace has not officially disclosed the reason behind the dismissal.
Questions over Purbaya’s management style had also surfaced over tax refunds after businesses complained that delays were squeezing company cash flows.

Purbaya said last week that he had instructed officials to increase scrutiny of tax refunds in the coal sector but acknowledged that implementation had apparently extended more broadly than he had intended and promised to investigate the problem.
Bhima said the dispute reflected internal coordination problems involving tax and customs officials and had angered businesses whose refunds were held back.
“This upset many business owners, as tax refunds were initially withheld for audits in the natural resources sector but they ultimately affected all sectors,” he said.
The episode added to a reputation Purbaya had cultivated as an unusually outspoken economic policymaker.
After replacing Sri Mulyani last year, Purbaya pursued a more expansionary approach aimed at accelerating an economy that has grown at roughly 5 per cent for much of the past decade, including moving large amounts of government cash into state banks to spur lending.
He repeatedly said Indonesia could achieve growth of around 6 per cent, a target broadly in line with Prabowo’s ambitions but above the country’s recent trend.

Bhima said Suahasil was likely to bring a markedly different tone to the job, with communications that would be “more careful, more credible” than what he called Purbaya’s “cowboy style” rhetoric.
“He’s a veteran in the Ministry of Finance bureaucracy since the Sri Mulyani era and understands internal matters. He’s considered capable of moderating internal conflicts and relationships,” Bhima said.
Suahasil is a former academic who headed the finance ministry’s Fiscal Policy Agency before becoming deputy finance minister in 2019, making him one of the most experienced officials inside the institution.
But analysts said a calmer style would not remove the difficult fiscal arithmetic awaiting him.
Indonesia’s 2026 budget deficit is forecast to widen to 2.85 per cent of GDP from an original projection of 2.68 per cent, bringing it closer to the legal 3 per cent ceiling as higher expenditure puts pressure on state finances.
Dipo Ramli, a researcher at the Center of Reform on Economics Indonesia, said Suahasil’s biggest challenge would be navigating “limited fiscal space”, particularly for regional governments, while Prabowo continued to pursue ambitious spending programmes.
“At the national level, [our financial situation] might still be considered safe, but we know that many regions have problematic [fiscal] situations,” Dipo said.


Prabowo has made costly programmes – including free nutritious meals for schoolchildren and pregnant women and the development of tens of thousands of Red and White village cooperatives – central to his economic agenda.
At the same time, his government is targeting growth of 6 per cent under its proposed 2027 budget while seeking to narrow the deficit, leaving the finance ministry with the task of reconciling faster expansion and heavy expenditure with Indonesia’s long-standing fiscal guardrails.
The immediate market reaction to Purbaya’s removal was mixed. Jakarta stocks recovered most of an earlier sell-off to finish 0.1 per cent lower on Monday, while the rupiah weakened 0.33 per cent against the US dollar.
This latest reshuffle follows Prabowo’s replacement of Sri Mulyani last year and the unexpected resignation in July of Bank Indonesia governor Perry Warjiyo, who has since been succeeded by Destry Damayanti.
Dipo said frequent changes in such positions could signal to foreign investors that the administration was still “trying to find its groove”.
“For foreign investors, the minister of finance and Bank Indonesia [governor] are usually considered stable positions. Replacing them is not a good idea, but considering our fiscal situation, I think adjustments are necessary,” he said.
“It’s true that the market might not like it, and foreign investors might not like it, but given the numerous problems, I don’t think there’s a problem with replacing the minister of finance.”
Additional reporting by Reuters


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Suahasil Nazara takes over amid growing pressure on the budget, with analysts expecting a more cautious approach to fiscal management


Suahasil Nazara takes over amid growing pressure on the budget, with analysts expecting a more cautious approach to fiscal management.


Prabowo Subianto

Danantara

Bhima Yudhistira

Indonesia’s Prabowo appoints third finance minister in under 2 years

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Suahasil Nazara takes over amid growing pressure on the budget, with analysts expecting a more cautious approach to fiscal management

Suahasil Nazara takes over amid growing pressure on the budget, with analysts expecting a more cautious approach to fiscal management