Indonesia’s Finance Minister Replaced as Prabowo Faces Growing Questions Over Economic Strategy

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Indonesian President Prabowo Subianto has unexpectedly replaced Finance Minister Purbaya Yudhi Sadewa, appointing his deputy, Suahasil Nazara, as the country’s new finance minister in a move that could signal a shift in economic policy.

Nazara was sworn in on September 14 after serving as deputy finance minister since 2019. He previously headed the Finance Ministry’s Fiscal Policy Agency. Purbaya, meanwhile, had been in the role for only about a year after replacing long-serving finance minister Sri Mulyani Indrawati in September 2025.

Purbaya had promoted a more aggressive growth strategy as Prabowo sought to raise Indonesia’s economic growth towards 8 percent. His policies included moving government funds into the banking system to boost liquidity and lending, but the approach also raised concerns among investors about fiscal discipline and policy stability.

The leadership change comes as Prabowo tries to balance his ambitious spending plans with Indonesia’s fiscal rules. The government has repeatedly pledged to keep the budget deficit below the legal limit of 3 percent of GDP, even as higher oil prices and major programmes put pressure on public finances.

Indonesia’s economy grew 5.11 percent in 2025, its strongest annual performance since 2022, but below the government’s 5.2 percent target and well short of Prabowo’s longer-term 8 percent ambition. The administration is also pursuing major initiatives, including its flagship free nutritious meals programme and policies aimed at boosting domestic investment and industrial development.

Nazara takes over after a period of unusual changes within Indonesia’s economic leadership. Central bank governor Perry Warjiyo resigned unexpectedly in July amid reported policy tensions with Purbaya, adding to questions over the government’s approach to stimulating growth.

The sudden removal of Purbaya has therefore attracted close attention from investors. Indonesia is Southeast Asia’s largest economy, and changes to fiscal policy can affect the rupiah, government bonds and investor confidence.

The government has not provided a detailed public explanation for Purbaya’s removal. Nazara’s immediate challenge will be to reassure markets that Indonesia remains committed to fiscal stability while delivering the faster economic growth Prabowo has promised.