Finance Minister Purbaya States Indonesian Economy Remains Stable and Budget Deficit Controlled

JAKARTA — Finance Minister Purbaya Yudhi Sadewa has emphasised that Indonesia’s economic condition remains stable amidst weakening financial markets and pressure on the rupiah exchange rate. Purbaya ensured that the government has calculated all state budget requirements, ranging from the defence sector to the Free Nutritious Meal (MBG) programme, without disrupting the structure of the State Budget (APBN).

According to the Minister, the state budget deficit is being kept within safe limits, specifically below 3 per cent of Gross Domestic Product (GDP). “We have calculated the budget to ensure the deficit remains below 3 per cent of GDP. Therefore, there is no need for concern,” Purbante stated when met at Halim Perdanakusuma Air Force Base, East Jakarta, on Monday (18/05/2026).

“Everything has been carefully calculated, including the MBG and other programmes, without disrupting other development initiatives. We have managed it well, including various subsidies such as fuel. We have calculated this meticulously, so there is no need for worry,” he explained.

Purbaya also addressed the decline in the Indonesia Composite Index (IHSG) during pre-opening trade, which fell by 94.344 points or 1.40 per cent to the level of 6,628.976 on Monday morning. He noted that the decline was merely influenced by short-term sentiment and does not reflect the fundamental economic condition of Indonesia.

“It is fine; we will rectify it. The economic foundation is strong. This is simply a matter of short-term sentiment,” Purbaya asserted.

The government, he added, has begun increasing interventions in the bond market to maintain stable debt security prices. “We will also enter the bond market starting today. We entered slightly last week, but from today, we will enter more significantly so that the bond market remains controlled,” he added.

Regarding concerns that Indonesia’s economic condition might mirror the 1997-1998 crisis due to the weakening rupiah, Purbaya assessed that the current situation is vastly different. He noted that during the 1998 crisis, Indonesia was experiencing a recession and prolonged socio-political unrest, whereas the national economy is currently growing, providing the government with the necessary fiscal space to implement improvements.