Indonesian economy far from crisis, shows strong growth: Deputy Finance Minister

Indonesia's economy is currently in a robust state, significantly distant from the crisis conditions experienced in 1997 and 1998, according to Deputy Finance Minister Juda Agung. He asserted that crucial indicators, including fiscal health, the balance of payments, and the financial system, are all well-maintained.

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The Indonesian economy today is far from the crisis situation that occurred in 1997 and 1998.

Agung explained that historical economic crises often stem from three primary sources: ballooning fiscal deficits, severe balance of payments pressure, and systemic banking collapses. He noted that none of these warning signs are currently evident in Indonesia. The fiscal deficit remains below 3%, and government debt financing is trusted by both domestic and foreign investors, reflected in stable state debt yields. "So, there are no signs of a fiscal crisis," Agung stated at a regional economic development conference in Jakarta.

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Fiscal indicators, balance of payments, and the financial system remain maintained.

He further elaborated that Indonesia has avoided the pitfalls seen in past crises, such as excessive foreign corporate borrowing that led to widespread company collapses when exchange rates weakened, as occurred in 1997-1998. The current balance of payments is described as "relatively healthy and balanced." Additionally, the risk of a banking crisis triggered by aggressive credit expansion or asset bubbles, similar to the 2008 US crisis, is not apparent in Indonesia's financial system.

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So, there are no signs of a fiscal crisis.

Overall, Agung emphasized that the Indonesian economy continues its strong growth trajectory. The first quarter of 2026 saw a year-on-year expansion of 5.61%, supported by robust household consumption (5.52%) and significant government spending (22%). This indicates that fiscal policies are effectively stimulating economic growth and preserving public purchasing power, with inflation also remaining controlled at 2.42% in April 2026.

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Currently, if we look at our balance of payments figures, they are relatively healthy and balanced. So, there are no signs of a balance of payments crisis.