President Prabowo Subianto launched a sweeping cabinet reshuffle on Monday, September 8, replacing five ministers and inaugurating one new official. The headline change came at the Ministry of Finance, where Sri Mulyani Indrawati was removed and economist Purbaya Yudhi Sadewa was sworn in. Markets stumbled on the news as investors weighed what it means for fiscal policy and growth.
The shake-up reached beyond finance. The State Secretariat said the changes covered the Coordinating Ministry for Political and Security Affairs, the Ministry of Finance, the Ministry of Protection of Indonesian Migrant Workers, the Ministry of Cooperatives and SMEs, and the Ministry of Youth and Sports. The government also created a new Ministry of Hajj and Umrah. Four posts received immediate appointees: Purbaya Yudhi Sadewa (Finance), Ferry Juliantono (Cooperatives and SMEs, replacing Budi Arie Setiadi), Mukhtarudin (Protection of Indonesian Migrant Workers, replacing Abdul Kadir Karding), and Irfan Yusuf Hasyim as Hajj and Umrah Minister with Dahnil Anzar Simanjuntak as deputy. Replacements for Youth and Sports Minister Dito Ariotedjo and Coordinating Minister for Political and Security Affairs Budi Gunawan were not named at the ceremony; the next day, Defence Minister Sjafrie Sjamsoeddin was tapped as ad-interim coordinating minister.
What changed in the cabinet reshuffle
Why move now? The State Secretariat framed the decision as the outcome of “continuous evaluations,” without pinning it to any single event. But the politics are hard to miss. Sri Mulyani’s conservative stance—popular with markets—often ran head-to-head with Prabowo’s push for fast delivery on big-ticket programs. Reuters reporting describes tensions over expansive spending plans (including free school meals) and notes how her abrupt exit—reportedly with an hour’s notice—came amid public unrest and pressure on living costs. She was succeeded immediately by Purbaya.
Purbaya set out a clear direction: growth first. He told reporters that 8% GDP growth within two to three years is “not impossible,” and said he would work with Bank Indonesia on measures to ease liquidity so credit can move faster through the economy. He also pledged to respect Indonesia’s 3% of GDP budget-deficit cap, a guardrail investors watch closely.
Markets, messages, and the road ahead
The handover rattled nerves. The rupiah and equities wobbled after Sri Mulyani’s removal, reflecting concern that Jakarta might trade credibility for speed. Purbaya has tried to calm that fear with two messages: he will coordinate tightly with the central bank, and he will stay within the deficit rule even as he accelerates existing programmes and funding channels.
Politically, the broader reshuffle plants loyalists where outcomes hit the public directly—cooperatives/SMEs, migrant-worker protection, and pilgrimage administration—while giving Prabowo more room to steer security policy via an interim coordinator. It reads as consolidation: align the cabinet with the president’s growth playbook, then move quickly.
The new finance chief now carries the weight of that bet. He must prove he can chase growth without denting stability. If he can keep investors onside while lifting jobs and incomes, the move will look shrewd. If not, the costs will show up in borrowing, the rupiah, and confidence. Either way, the cabinet reshuffle has set the tone for the rest of Prabowo’s first year: bold moves, quick execution, and a higher bar for results.
