Indonesia Finance Minister Maintains Deficit Cap Pending Faster Growth

Indonesia's finance minister, Purbaya Yudhi Sadewa, has affirmed that the country will maintain its strict fiscal discipline, including a 3% deficit-to-GDP cap, until the economy demonstrates faster growth through more efficient spending. Despite pressure for fiscal expansion amid recent social unrest, the minister emphasized the importance of efficiency over increased spending and plans to enhance tax collection and customs reform to boost revenue. The government is actively supporting growth through a US$12 billion liquidity injection into banks and a Rp30 trillion (about US$2 billion) stimulus package targeting various sectors, including labor-intensive programs and aid for tourism and housing. Coordinating Minister Airlangga Hartarto highlighted ongoing positive government spending and investments, with efforts to roll out additional stimulus measures by year-end. Economists and the central bank expect Indonesia to meet or exceed its 5.2% growth target for 2025, supported by coordinated fiscal and monetary policies such as Bank Indonesia's interest rate cuts designed to boost consumption and credit demand. Overall, Indonesia aims to balance fiscal prudence with targeted stimulus to achieve sustainable economic growth.