The Economy Weakens, Minister Of Finance Purbaya Criticizes Past Fiscal-Moneter Policy

JAKARTA - Minister of Finance Purbaya Yudhi Sadive assessed that the turmoil of demonstrations that had occurred in Indonesia, which claimed lives, could not be separated from prolonged economic pressure due to errors in the management of fiscal and monetary policies.

"Yesterday the demonstration was due to prolonged pressure on the economy due to fiscal and monetary errors that we actually control," said Purbaya in a working meeting with Commission XI of the Indonesian House of Representatives, Wednesday, September 10.

He explained that the economic slowdown felt by the community was triggered by the slow realization of government spending, while the funds were actually stored in Bank Indonesia (BI).

According to him, although interest rates are low, the supply of primary money in the economy is very limited, and even recorded negative growth.

"Since mid-2023, money has been absorbed gradually and down until its growth is zero before the second half of 2024. So that's what you feel in the economy is slowing down significantly, the real sector is difficult, everything is difficult, the tagline of the Dark Indonesia comes out. We all point to this because it's global, even though there is a wrong domestic policy that mainly disturbs us," he said.

According to Purbaya, in early 2025, to be precise until April, the growth of money had improved by 7 percent, but again decreased from May to August.

"So the 2024 economic slowdown period, which was caused by tight money, was restored slightly, has not fully recovered, has been suppressed by the economy," he said.

Purbaya also regretted the lack of supervision from Commission XI of the DPR RI over the policies taken by the Ministry of Finance and Bank Indonesia at that time.

"Here, commission XI has a meeting with the Minister of Finance for how many hundreds of days a year, why never question that. Now I come here suddenly there are so many questions that should have broken up at that time, but that's okay," he said.

As a form of correction, Purbaya stated that he would immediately improve these conditions, by emphasizing the importance of accelerating budget realization and returning funds from the central bank to the national banking system so that economic activity can move again.

"I will return to worsening conditions because of my own steps. How about it? The best thing is to accelerate budget spending. Then return it to the economic system to the bank, to Himbara for example," he said.