A member of President-elect Prabowo Subianto’s transition team has assured that the incoming administration will maintain Indonesia’s reputation for fiscal prudence in order to address concerns from investors and international institutions regarding future state spending. Thomas Djiwandono, a transition team member, emphasized Prabowo’s commitment to the deficit target agreed upon by the current government and the House of Representatives.
At a press conference held with officials from the outgoing administration, Thomas emphasized Prabowo’s commitment to maintaining existing fiscal regulations, which aim to prevent another monetary crisis like the 1997 Asian Financial Crisis. A law passed in 2003 states that the fiscal deficit should not exceed 3 percent of GDP in any fiscal year and that the government’s total debt must remain under 60 percent of GDP. These regulations are aimed at maintaining fiscal policy discipline.
Reportedly, Prabowo had planned to finance his campaign promises by gradually increasing the debt-to-GDP ratio in the state budget from 39 percent to 50 percent by the end of his presidency. However, Thomas has denied these claims.
Prabowo’s transition team is focused on ensuring financial stability and responsible spending in order to address concerns about Indonesia’s economic future. By adhering to existing fiscal regulations and maintaining prudence in state spending, they aim to bolster investor confidence and sustain Indonesia’s economic progress.
