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

Finance Minister Purbaya Yudhi Sadewa revealed that the government is beginning to rely on a new strategy to drive national economic growth. No longer solely dependent on state spending through the State Budget (APBN), the government is now optimising state cash management as an instrument to strengthen banking liquidity and mobilise the private sector, which is the main engine of the economy. According to Purbaya, the contribution of government spending to national economic activity is only around 7–10 percent. Therefore, state cash management is considered capable of acting as a lever for the approximately 90 percent of economic activity originating from the private sector. “I observe that cash management, the management of government money, can significantly influence the Indonesian economy. It can animate the 90 percent of the economy besides the 7-10 percent direct spending,” Purbaya stated 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 capacity for credit distribution becomes larger, while also increasing the amount of base money (M0) without disrupting Bank Indonesia’s independence in conducting its monetary policy. This step was also taken when economic activity experienced a slowdown in May and June this year. With stronger liquidity, the government hopes banks can increase credit distribution to the business sector, thereby reviving economic activity and accelerating growth. “So I placed Rp400 trillion in the banks, that will strengthen their liquidity condition so they can provide credit and the economy can grow again,” he explained. Purbaya emphasised that in the future, fiscal policy will no longer be measured solely by the amount of state spending. The government will utilise cash management more actively so that state funds can become an instrument that directly moves the financial system and drives national economic growth. “So going forward, fiscal policy is not just about government spending. You can directly influence the economy with better cash management,” the Finance Minister concluded.