Indonesia’s New Finance Minister and the Eight Percent Dream

At a time when much of the world is lowering its economic ambitions, Indonesia has chosen to dream bigger. Purbaya Yudhi Sadewa, who replaced Sri Mulyani as Finance Minister in September 2025, has set a target of 8 percent growth—a number that sounds more like a statement of faith than a realistic forecast.

For Purbaya, a data-driven economist with a technocrat’s composure, the dream is not mere rhetoric. He argues that Indonesia’s economy has grown too comfortable hovering around 5 percent—too cautious to break into the ranks of upper-middle-income nations.

 “As long as liquidity is available and the real sector moves,” he says, “the economic wheel will spin faster.”

From campus to cabinet
A graduate of electrical engineering from Bandung Institute of Technology (ITB) and a PhD in economics from Purdue University, Purbaya is known for his rational approach in a field often clouded by politics. 

As head of the Deposit Insurance Corporation (LPS) from 2020, he guided Indonesia’s financial system through the pandemic without panic. 

Now, as Finance Minister, he signals a shift toward a more growth-oriented posture: redirecting some US$12 billion of idle government funds to state-owned banks to boost productive lending—what he calls “a fresh transfusion for the domestic economy.”

It marks a subtle but clear turn from Sri Mulyani’s fiscal prudence toward what officials describe as “controlled expansion”—a willingness to take calculated risks for higher growth.

A bold dream in gloomy skies
The timing is hardly ideal. The United States and Europe are wrestling with high interest rates, China is slowing under the weight of its property crisis, and commodity prices are increasingly volatile. 

With global growth forecasts sliding below 3 percent, Indonesia’s 8 percent target has drawn both curiosity and skepticism in equal measure.

To make it happen, Indonesia would need to double its productivity. Investment must flow into manufacturing, green energy, and technology. 

Tax and licensing reforms must continue. In short, 8 percent growth will not come from monetary easing alone—it demands structural transformation at a scale rarely sustained by developing economies.

Momentum or mirage
Yet Indonesia does have some tailwinds: a young population, a vast domestic market, and a relatively stable political transition. 

The real question is whether Purbaya’s liquidity-friendly, pro-productivity approach will spark a growth multiplier—or ignite inflationary pressure and fiscal strain.

So far, he remains unflustered. He speaks not as a populist, but as a technocrat convinced that policy confidence can itself drive market confidence. 

“Growth,” he says, “is both a political choice and an economic decision.”

A new direction amid uncertainty
While much of the world braces for slower days ahead, Indonesia has chosen a different path: to dream, rather than to explain why it cannot. 

And behind that dream stands a calm but ambitious figure who knows that great economic stories begin with a willingness to take risks.

Purbaya Yudhi Sadewa may or may not deliver 8 percent growth. But by shifting Indonesia’s national imagination—from survival to acceleration—he has already changed the tone. 

After all, history is not always written by those who hit the target, but by those who dare to set it when others have stopped believing in growth.

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