Indonesia's President Faces Big Budget Test as Public Support Falls

Indonesian President Prabowo Subianto is set to present his government's 2027 budget plan on a Friday that is also Indonesia's Independence Day. The announcement is being closely watched by business leaders and investors around the world. Prabowo came to power in October 2024 with big promises, but his popularity has dropped sharply since then. Many people are now waiting to see if his budget plan can restore trust in his leadership.

Prabowo won the presidential election by a wide margin. He promised to fight corruption, grow Indonesia's economy from 5% to 8%, and provide free meals to millions of children across the country. Those were bold goals, and many Indonesians were excited when he took office. However, delivering on all those promises has turned out to be much harder than expected.

Since taking office, Prabowo's government has faced a number of serious problems. Indonesia's currency, called the rupiah, has lost value compared to other currencies. The country's stock market has also performed poorly, which worries investors. On top of that, there are concerns that the government is spending too much money and not managing its finances carefully enough.

One of Prabowo's most important programs — giving free meals to schoolchildren — has run into trouble. The program has faced budget cuts, meaning less money is available to run it. There have also been allegations, or accusations, that the program has been poorly managed. These problems have damaged the president's image with ordinary citizens.

Earlier this year, Prabowo surprised global markets with a major announcement. He said that all exports of Indonesia's important natural resources — like coal and palm oil — would be controlled by a new government-run organization called Danantara Sumberdaya Indonesia. Many investors were alarmed because they were not expecting such a big change. Since then, some officials have said the new group will only watch over exports rather than fully control them, but its exact role is still unclear.

Economists and analysts say the 2027 budget presentation is one of the most important moments for Indonesia in recent years. Irman Faiz, an economist at Bank Danamon, called it a key 'credibility checkpoint' for global investors. He noted that investors have had to deal with many unexpected policy changes in the past two years. He warned that investors are running out of patience with surprises.

Indonesia's government is also getting close to a constitutional spending limit. The country's fiscal deficit — the gap between what the government earns and what it spends — is close to 2.8% of its total economic output. The national constitution sets a ceiling of 3%, which means the government cannot go much further into debt. Staying within that limit will be a key challenge for the new budget.

Prabowo's approval rating has fallen from about 81% to just 51% in only eight months. That is a drop of 30 percentage points, which is very steep in a short amount of time. Polls suggest that people are unhappy because of the struggling economy and concerns about how laws are being enforced. Analysts say the president must address these doubts directly if he wants to regain the public's trust.

Experts say Prabowo has a difficult job ahead of him. Yose Rizal Damuri, a director at a major think tank called the Center for Strategic and International Studies, said investors are hoping the president will give clearer details about the new export organization. Arya Fernandes, another expert at the same institution, said Prabowo must ease worries about the economy and his key programs. As Fernandes put it, 'Given the current situation, that is certainly no easy task.'