No Longer Relying on State Spending, This Is How Purbaya Boosts Economic Growth

Jakarta, VIVA – Finance Minister Purbaya Yudhi Sadewa has revealed that the government is beginning to adopt a new strategy to drive national economic growth.

No longer relying solely on state spending through the State Budget (APBN), the government is now optimising the management of state cash as an instrument to strengthen banking liquidity and mobilise the private sector, which is the main engine of the economy.

According to Purbaya, government spending contributes only around 7–10 per cent of national economic activity. For this reason, state cash management is considered capable of acting as a lever for the roughly 90 per cent of economic activity that originates from the private sector.

“I have observed that cash management, the management of government money, can significantly influence the Indonesian economy. It can revitalise the 90 per cent of the economy beyond direct spending, which only accounts for 7–10 per cent,” Purbaya said in a statement on Saturday, 11 July 2026.

As part of this strategy, the government has placed state funds previously held at Bank Indonesia into the national banking system.

This policy is designed to strengthen banking liquidity so that the room for credit disbursement becomes larger, while also increasing the amount of base money (M0) without undermining Bank Indonesia’s independence in conducting its monetary policy.

The step was also taken when economic activity slowed in May and June this year. With stronger liquidity, the government hopes banks will be able to increase lending to the business world so that economic activity picks up again and growth can be accelerated.

“So I placed Rp400 trillion in the banking sector — that will strengthen banks’ liquidity position so they can extend credit and the economy can grow again,” he explained.

Purbaya stressed that going forward, fiscal policy will no longer be measured solely by the size of state spending. The government will utilise cash management more actively so that state funds can become an instrument that directly mobilises the financial system and drives national economic growth.

“So fiscal policy in future is not just about government spending. You can directly influence the economy through better cash management,” the Finance Minister concluded.