Prabowo-Gibran First Anniversary: Maintaining the Rhythm, amid Challenges
The Prabowo-Gibran administration has just reached its 1-year anniversary, following a smooth transition from the Jokowi administration. Despite a well-managed handover, the new government is facing tough challenges, especially from abroad. Thanks to the smooth transition, several of Prabowo’s campaign programs – such as Free Nutritious Meals (Makan Bergizi Gratis/MBG), free medical checkups, energy and food self-sufficiency, among others, have already been implemented, in his first year in power. On the market side, the Jakarta Composite Index (JCI) has moved like a roller coaster, hitting its lowest level since 2021 (at 6,011) while also reaching an all-time high (at 8,250) within the same year. This dramatic fluctuation vividly illustrates the turbulence of the first year of Prabowo in office, a phenomenon which we believe could persist for several more months or even years. Despite this, with a change in the Finance Minister position, from Sri Mulyani Indrawati to Purbaya Yudhi Sadewa, we expect fiscal policy to become more expansionary than previously, without breaching the 3% deficit limit, in order to achieve stronger economic growth of 8% by 2029.

Money supply expansion and the strategic state: A “Soemitronomics” perspective
In several interviews, Purbaya has regularly highlighted how Indonesia’s domestic economy has steadily grown, supported by an expansionary M1 policy that drives consumption levels. He is also a strong proponent of Soemitronomics—the economic philosophy espoused by Prof. Soemitro Djojohadikusumo (Prabowo’s father) which emphasizes strong state involvement in strategic sectors, rural empowerment and industrial self-reliance. This approach blends nationalism with pragmatic economics, aiming for inclusive growth and reduced foreign dependence. As mentioned earlier, we expect these principles to continue shaping Indonesia’s economic policies, most notably through such aggressive measures as the Rp200 trillion placement in Himbara, intended to stimulate credit growth.

INKP - Not this time

INKP - Not this time

Hernanda Cahyo

Pulp & Paper

05 August 2025 - 07.39am

INKP - Not this time

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