“If we remove the subsidies, inflation will increase, the cost of capital will increase,” Purbaya said. “There will be more protests on the streets, which will lower economic growth quite significantly. It’s a very risky policy.”
(April 2): Indonesia will hold off raising subsidised fuel prices despite ongoing oil shocks from the Iran war, with Finance Minister Purbaya Yudhi Sadewa warning any hike could undermine growth and threaten social stability.
In an exclusive interview with Bloomberg News on Thursday, Purbaya said the government will instead rely on a mix of fiscal measures — including broad 10% cuts to ministry spending and a potential new export tax on coal — to absorb the hit while keeping the deficit below its legal limit.
