Prabowo’s First 100 Days and beyond as President: A Security-Focused Economic Agenda

Abstract

This survey assesses Indonesia’s economic performance during President Prabowo Subianto’s first 100 days in office, highlighting his security-leaning economic programs amid rising geopolitical tension and a looming global trade war. This is reflected in his costly and challenging food and fuel security programs. To appease all political parties supporting his presidential election, an enlarged cabinet of 48 ministers and an unusually high 56 vice-ministers was formed. Below-expected consumer demand, declining commodity prices, continued high interest rates and a weakening currency kept the 2024 economic growth rate at around 5.0%, which is expected to extend into 2025. Sectoral performance was mixed, with the automotive sector slowly recovering, but results remaining below pre-Covid levels. Coal prices declined from their peak on 26 September 2022, but the coal sector held up well, with production increasing to 812 million tonnes in 2024, close to pre-Covid levels. Rice production dropped early last year, driving rice prices to an all-time high and necessitating substantial imports to bring down prices by year-end. Looking ahead, rising expenditures covering the president’s campaign promises are straining the budget. Meanwhile, revenue targets will be hard to meet given that the scope of this year’s value-added tax hike has been narrowed to include only luxury consumer goods, following strong public opposition. To maintain the budget deficit, a massive budget reallocation was imposed.