Finance Minister Purbaya's Story of the Deteriorating Economy in 2020, with Many Banks on the Brink of Collapse

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa revealed that various parties claim his policy of placing government funds in state-owned banks, or Himbara, has failed. So far, Purbaya has placed Rp200 trillion in government funds. These funds were originally due in March 2026 but have been extended until September 2026. In early 2026, Purbaya stated he will place an additional Rp100 trillion in commercial banks. “There are various parties claiming that the government adding liquidity didn’t work, (but) that’s what turned our economy around in 2025,” Purbaya explained during a working meeting with Commission XI of the House of Representatives on Monday (6/4/2026). Purbaya is convinced that this policy has succeeded. He recounted historical data on Indonesia’s economy. According to him, in 2020, Indonesia’s economic growth faltered. At that time, many banks were on the verge of collapse. Not just small banks, but also large ones. “When I assisted the President, we pushed it up a bit to 13% (credit). The sudden pressure disappeared but the economy hadn’t accelerated yet, then we forced it again,” he said. Then in 2021, bank credit grew to 20%. This was due to synchronised policies from the central bank and government to boost economic growth. After that, Indonesia’s economic growth accelerated rapidly, and it could be said that Indonesia successfully survived COVID-19. “So that’s not a coincidence but due to good fiscal and monetary responses,” Purbaya emphasised. Indonesia’s economy deteriorated again in 2025. At that time, there were large demonstrations in August 2025. This was triggered by the public’s economic conditions being under pressure. Purbaya admitted he tried to restore Indonesia’s economic situation. One of them was through the policy of placing government funds. “I did it to bring it back again even though there were blows from all sides,” he explained. It proved that from this policy, there was real improvement in Indonesia’s economy. People’s consumption increased and credit began to grow to 9.4%. Purbaya promised to continue pushing until it reaches double digits and above 20%. However, he promised to remain cautious so that Indonesia’s economy doesn’t overheat. “Clearly, the policy has a significant impact. This policy is real, deposits and credit (are up) and the cost of funds is lower. This impact is expected to increase interest in credit distribution going forward so that the push for economic growth is stronger,” he said.