Indonesia Far from 1998 Crisis, Purbaya: Economy is Expanding!

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has stated that Indonesia’s economic condition remains quite healthy and is far from the crisis that occurred in 1998.

Citing historical context, the 1998 monetary crisis was the collapse of Indonesia’s financial and economic system, marked by the plummeting rupiah exchange rate, mass corporate bankruptcies due to ballooning foreign debt, and the collapse of the banking sector.

Purbaya explained that in the first quarter of 2026, all economic sectors grew quite well and were able to support Indonesia’s economic growth in Q1-2026.

“If we look at the economic growth figures for the first quarter, we can confirm that all economic sectors grew well. Government spending is accelerating, growing quite high, such as the Free Nutritious Meals (MBG) programme and the Red and White Village Cooperatives (KDMP). It is indeed significant, but sectors outside the government also grew very well,” Purbaya said during the CNBC Indonesia Economic Update 2026, quoted Monday (22/6/2026).

Purbaya continued that the contribution of government spending to the Indonesian economy only reached 7.7%. The remainder lies in the private sector.

“If we look at it, the government’s contribution, government spending to the economy, is only around 7.7 percent. The rest is the private sector. So if the private sector does not move, it is almost certain we could not have grown by 5.61% in the first quarter,” he continued.

He said that President Prabowo Subianto’s strategy to build the economy in both the government and private sectors has been successful.

“So this shows that the President’s (Prabowo) strategy to build the economy in the government and private sectors is working well. That is something many people often forget,” he explained.

Furthermore, the still-strong sales of automobiles and cement lead his party to predict that Indonesia’s economy in the second quarter of 2026 could potentially still grow above 5%.

“So the second quarter should also still be quite good for our economy. So it is far from the impression that we are heading towards a 1998 crisis again. Our economy is expanding. Perhaps above 5.4% or more,” he clarified.