Pressure mounts on Indonesia's finance minister

Sliding rupiah, falling tax collection hurting President Prabowo's economic ambitions

- Wahyudi Soeriaatmadja

Indonesian Finance Minister Sri Mulyani Indrawati, long regarded as one of Asia's finest finance ministers, is facing mounting pressure after a recent series of problems shook the economy.

Her prudent fiscal approach has put her at odds with President Prabowo Subianto, who is five months into his term and pushing for faster economic growth.

Glitches in Coretax, the country's new digital tax administration system rolled out on Jan 1, have also contributed to an unexpected budget deficit early in the year.

Adding to the heat, the rupiah recently tumbled to its lowest level since 1998. On March 18, the main Jakarta Composite Index slid by as much as 7.1 per cent over investor concerns about Indonesia's fiscal position and its growth prospects.

Speculation grew that Dr Sri Mulyani could resign, with whispers suggesting that she could be replaced by one of three people, including her deputy at the Finance Ministry — Mr Prabowo's nephew, Mr Thomas Djiwandono.

But she told a news conference on March 18: "I am not resigning and will continue my role in safeguarding state finances."

Dr Sri Mulyani served two terms as finance minister under former president Joko Widodo and was reappointed by Mr Prabowo in October 2024. She also served as finance minister between 2005 and 2010 under former president Susilo Bambang Yudhoyono.

She is under pressure to ensure that Mr Prabowo is able to fulfil his election promises, including growing the economy by 8 per cent each year later in his five-year term.