President Prabowo Subianto has reshuffled five of his ministers. The new finance minister has launched a new strategy to stimulate the economy, which has been stagnant at around 5%. How will banks utilize Rp 200 trillion in liquidity provided by the Government amidst a struggling real sector and numerous factories closures? What will economic and banks credit growth be in 2026?
IT’S been a year since President Prabowo Subianto took office, and the initially hopeful political honeymoon period has now ended with a challenging socio-economic test. The large-scale demonstrations that led to looting in August 2025 are a stark reminder that the promise of prosperity has not been fully realized by the people. The cost of living is getting heavier, purchasing power is weakening, and job opportunities are shrinking.
The middle class, which has shrunk by 1.2 million people annually since 2019, is increasingly squeezed. They must bear a heavier tax burden amid rising prices for necessities. In contrast, public officials appeared insensitive, for example, when legislators danced for joy after the announcement of a Rp 50 million per month increase in housing allowances. This action deepened public disappointment towards the Government.
