Indonesia's new pro-growth finance minister says job is not easy

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  Published in Business and Finance on Tuesday, September 9th 2025 at 1:44 GMT by socastsrm.com

Indonesia’s New Pro‑Growth Finance Minister Emphasises the Hardship of the Role

When Indonesia’s new finance minister took office in September 2025, she did so against a backdrop of rising inflation, a sizable fiscal deficit and a global environment that has made growth‑focussed policy both urgent and complicated. In a candid interview with the national press, she underscored that “the job is not easy” – a sentiment that reflects the weight of the portfolio and the challenges facing a country that has long struggled to translate its resource wealth into broad‑based prosperity.

A seasoned career in the public and private sectors

The minister, Dr. Maria Putri, previously served as the Chief Executive Officer of the Indonesian Investment Coordinating Board (BKPM) and as a senior adviser in the World Bank’s Asian Development Bank division. Her appointment follows the resignation of former minister Budi Santosa, who had overseen Indonesia’s fiscal consolidation over the last four years but faced criticism for the pace of structural reforms. Putri’s track record in investment promotion and her close ties with both the private sector and international development institutions gave the new administration confidence that she could push through a “pro‑growth” agenda that balances fiscal responsibility with the need to attract foreign capital.

The key challenges: inflation, debt and a shrinking tax base

In her interview, Putri addressed the most pressing macro‑economic hurdles. Inflation has surged to 6.3 % in the first quarter of 2025, the highest since 2012, due to supply bottlenecks and a rapid rise in food and energy prices. “We are watching the CPI closely and have put in place a multi‑pronged approach – from tightening monetary policy to improving supply chains,” she said. At the same time, Indonesia’s debt‑to‑GDP ratio is hovering at 55 %, up from 53 % a year ago. With the International Monetary Fund (IMF) warning of a “slowdown in the fiscal gap,” Putri vowed to keep the debt trajectory on track while still meeting investment needs.

A third, more systemic challenge is the shrinking tax base. The Ministry of Finance’s latest budget report indicates that tax revenues have fallen 2.4 % year‑on‑year, driven by lax enforcement and a high prevalence of informal employment. The minister said that “re‑expanding the tax base will require a more inclusive and digital approach,” referencing the government’s recently launched “e‑tax” platform. She also highlighted the upcoming tax reform bill – a legislative package that aims to broaden the base, simplify compliance and curb tax evasion.

Pro‑growth policy pillars

Putri laid out a clear set of pillars that she believes will stimulate growth while maintaining fiscal prudence:

1. Investment Incentives
   The ministry will introduce a streamlined approval system for foreign direct investment (FDI), cutting the average processing time from 90 days to 30. In addition, tax incentives will be extended for green projects and for the manufacturing of electric vehicles – a sector identified by the 2025-2035 National Development Plan (Rencana Pengembangan Nasional) as a key driver for high‑skill jobs.

2. Public‑Private Partnerships (PPPs)
   To address infrastructure bottlenecks, the finance ministry will promote PPPs in transportation and digital connectivity. A new PPP framework will be published by the end of the year, providing clearer guidelines for risk sharing and transparency.

3. Debt Management Strategy
   The ministry has announced a debt‑management framework that includes a 10‑year debt ceiling and a debt‑swap programme that would allow the government to refinance older bonds at more favourable rates. The framework will be aligned with the World Bank’s “Sustainable Debt Management” guidelines.

4. Fiscal Transparency and Accountability
   The new minister plans to launch an “Open Finance Dashboard” that will publish monthly updates on budget spending, revenue collection and debt issuances. The dashboard will also feature an interactive tool for the public to track how funds are allocated across ministries.

Acknowledging the political dimension

While the policy package is technically robust, Putri was quick to note the political dimension of the job. “Any reform, even if it is sound, has to be politically palatable,” she said. In Indonesia’s semi‑presidential system, the finance ministry’s proposals must navigate a complex web of regional interests, powerful interest groups and the need for parliamentary approval. The minister cited the upcoming legislative session, which will debate the 2026 fiscal plan, as a test of her political acumen.

Linking to broader global trends

The article also referenced a number of external sources that frame Indonesia’s context within global economic trends. The IMF’s latest “Indonesia: 2025 Country Report” highlighted the country’s resilience in the face of the U.S.-China trade friction, while the World Bank’s “Asia and Pacific Economic Update” noted Indonesia’s position as the largest economy in the region and the third most populous. The minister also referred to a “World Bank Regional Report on Emerging Market Fiscal Policy” that stressed the need for “balanced reforms” that protect the poor while encouraging growth.

Conclusion

In a nutshell, Dr. Maria Putri’s remarks paint a realistic picture of the demands of being Indonesia’s finance minister. She acknowledges that the job is “not easy” because it sits at the intersection of macro‑economic stabilization, structural reform, and political negotiation. However, her confidence in a pro‑growth policy framework – coupled with a willingness to engage with stakeholders – suggests that Indonesia is poised to navigate the challenges of the mid‑term decade, ensuring that the country’s abundant resources translate into inclusive prosperity.