Reshuffle of the Minister of Finance: Focus on Short-Term Economic Recovery

Jakarta — The appointment of Purbaya Yudhi Sadewa as Minister of Finance, replacing Sri Mulyani Indrawati, reflects a shift in national economic policy, particularly regarding the state’s role in fostering inclusive and effective economic development.

According to Ariyo Irhamna, an observer from the Institute for Development of Economics and Finance (Indef), there has been a clear ideological difference between SMI and President Prabowo since the beginning.

“Sri Mulyani tends to emphasize the principle of minimal government involvement in the economy, leaving most of the dynamics to market mechanisms,” said the Paramadina University lecturer in a written statement on Tuesday (9/9).

Meanwhile, he continued, President Prabowo encourages an active and optimal role for the government through strategic fiscal instruments, financing, and strengthening state-owned enterprises.

This change, he said, ensures that fiscal policy aligns with the vision of inclusive and sovereign national development.

“The short-term priority of the Minister of Finance should be economic recovery while maintaining fiscal and social stability,” he said.

To support economic recovery, Ariyo said, two fiscal and policy measures can be implemented immediately.

First, he said, increase the non-taxable income (PTKP) to 75-80 million rupiah per year so that low- to middle-income communities have more spending power.

Second, he said, reduce the VAT rate to 10 percent, with the government bearing 1 percent (PPN DTP), so that household purchasing power is maintained without drastically reducing state revenue.

“The day after the inauguration, the IHSG experienced a decline, which I think is a natural market reaction. The market needs time to assess the direction of the new policy,” he said.

He added that previous experience shows that a decline in the IHSG when a new cabinet is inaugurated is not a negative fundamental indicator but rather an initial response to uncertainty.

He advised the new finance minister to strictly maintain fiscal discipline so that the state budget does not become an “unlimited ATM” that continues to disburse funds for every need without prioritization.

Therefore, he continued, every fiscal policy must be carefully measured, targeted, and planned so that the state budget remains healthy while effectively supporting economic growth.

He said the key is the speed and accuracy of policy implementation, as well as improvements in communication and professionalism within the Ministry of Finance bureaucracy.

“The Ministry of Finance is expected to drive the economy, respond to the market, and execute fiscal and social programs efficiently,” he concluded. (*) DW