Indonesia not heading for 1997-1998 crisis, says Finance Minister

Indonesia's Finance Minister Purbaya Yudhi Sadewa has asserted that the nation is not on a path to an economic, financial, or monetary crisis akin to the 1997-1998 period. Speaking at a press conference in Jakarta on Friday, June 5, 2026, Sadewa acknowledged a budget deficit of Rp180.4 trillion, or 0.70 percent of GDP, by the end of May. However, he emphasized that the country's fiscal condition remains secure, bolstered by robust tax collection.

"We are not heading towards a situation like 1997-1998 again. Our fiscal is good, the economy is good, there are just negative sentiments here and there that are slightly disturbing the exchange rate, but that should be fixable with a better combination between the government, the Ministry of Finance, and the central bank," Sadewa stated during a visit to the Tanjung Priok Customs and Excise Office in Jakarta on Saturday, June 6, 2026.

The recent weakening of the rupiah, which surpassed Rp18,000 per US dollar for the first time on Thursday, June 4, 2026, had sparked concerns about a potential repeat of the past economic crisis. Sadewa, however, expressed confidence that enhanced synchronization between fiscal and monetary policies would lead to the rupiah's recovery. This synchronization includes making domestic financial instruments more attractive to encourage foreign capital inflow and maintaining liquidity in the money and banking sectors through government cash management at Bank Indonesia (BI), along with improved remuneration from BI.

Sadewa further highlighted that the coordination among stakeholders would reduce production costs for businesses reliant on imported raw materials. "We will ensure this happens in the coming period," he said. He concluded by stating, "What I can say now is that the fiscal is good, the economy is good, the President's leadership is still strong enough to ensure everything proceeds according to the President's development strategy."