By Gayatri Suroyo, Stefanno Sulaiman and Ankur Banerjee
JAKARTA, Sept 14 (Reuters) – The sacking of pro-growth, outspoken Indonesian Finance Minister Purbaya Yudhi Sadewa and President Prabowo Subianto’s decision to elevate his deputy, Suahasil Nazara, to the country’s top finance job will likely reassure investors after months of concerns about policy credibility.
Suahasil’s appointment on Monday – Prabowo’s third finance minister in less than two years – comes just six weeks after another major shake-up in Indonesia’s policymaking circle, when Bank Indonesia Governor Perry Warjiyo unexpectedly resigned in July.
A technocrat who had served as deputy minister since 2019, Suahasil, 55, is a familiar figure to analysts and investors. Several said his promotion appears aimed at restoring confidence in a ministry that has faced mounting scrutiny over fiscal discipline and policymaking.
“Replacing the finance minister is a good move,” said Richard Borsuk, an adjunct senior fellow at Singapore’s S. Rajaratnam School of International Studies at Nanyang Technological University.
“The market should like it and rating agencies would already know and like Nazara,” he added.
Purbaya was ousted just a year after his shock appointment replacing long-standing and widely respected finance minister Sri Mulyani Indrawati in September 2025. Sri Mulyani’s abrupt dismissal raised questions about the fiscal prudence that had underpinned investor confidence in Southeast Asia’s largest economy for years.
While Purbaya’s tenure saw Indonesia’s economic growth climbing to the highest in three years, he also oversaw the country running a wide budget deficit and credit rating outlook downgrades by Fitch and Moody’s for unpredictable policymaking.
His outspoken style and unconventional policies had also failed to calm markets amid jitters about fiscal overspending and central bank interference.
“The new finance minister worked closely with Sri Mulyani for years and would have learned a lot from her,” Borsuk said.
Angus Mackintosh, ASEAN specialist at advisory and research firm Aletheia Capital, said the appointment should provide “a more stable and predictable economic policy making backdrop for Indonesia and reassure both bond and equity markets.”
Suahasil holds a doctoral degree from the University of Illinois at Urbana-Champaign and previously worked on government policies on fiscal decentralisation and poverty reduction. He also headed the finance ministry’s fiscal policy office between 2016 and 2019 in a role that included formulating tax policies.
In his first remarks as minister, Suahasil vowed to safeguard the credibility of the state budget while continuing to support Prabowo’s flagship programmes. He also pledged to keep the annual budget deficit below the legislated ceiling of 3% of GDP.
‘MOVING AWAY FROM POPULISM’
Suahasil’s appointment follows a series of developments that suggest Indonesia “may be slowly moving away from the more populist and interventionist policymaking that has characterised Prabowo’s presidency so far,” said Gareth Leather, senior analyst at consultancy Capital Economics.
Leather also pointed to Prabowo’s appointment of deputy governor Destry Damayanti as central bank chief, replacing Warjiyo.
The new finance minister should “reduce political pressure on Bank Indonesia’s new governor to cut rates to support growth”, he said, referring to reported disagreements between Warjiyo and Purbaya before the former governor’s surprise departure.
Still, Suahasil faces significant challenges.
Irman Faiz, Bank Danamon’s economist, said Suahasil would have to decide what to do with Purbaya’s unconventional policy to manage the Indonesian government reserve fund at state-owned commercial banks, instead of at the central bank.
Rising global oil prices could meanwhile put fresh pressure on the government’s subsidy bill, particularly with the rupiah hovering near a record low against the U.S. dollar.
Some analysts also cautioned against expecting a major shift in policy direction.
A senior Jakarta-based analyst who declined to be named said despite Suahasil’s experience, it was unlikely his appointment would fundamentally alter Indonesia’s fiscal trajectory.
“Whoever the finance minister is, the policy will be the same if the president still decides the budget,” the analyst said, adding that a more meaningful shift would require Suahasil to persuade Prabowo to back policies with a larger economic multiplier than the current flagship programme of free school meals.
“(Suahasil) will have to juggle the mandate the president gives, including to accommodate demand for higher economic growth without disrupting fiscal credibility,” they added.
(Reporting by Gayatri Suroyo and Stefanno Sulaiman; Additional reporting by Ankur Banerjee in Singapore; editing by Gibran Peshimam and Ros Russell)
