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View all search resultsEconomy not as weak as many fear, says ex-minister Chatib Basri
Amid rumors that he might be restored to his former post as finance minister, Chatib has pointed to investor confidence in the government's fiscal management as the key issue at present.
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Finance Minister Chatib Basri speaks on Sept. 18, 2014, at the 21st CLSA Investors' Forum in Hong Kong, China. (AFP/Xaume Olleros)
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enior economist and former finance minister Chatib Basri has pushed back against growing concerns about the country’s economic outlook, arguing that the "domestic situation is not as bad as people imagine", despite mounting fiscal issues and external pressures.
"This is the question I am constantly asked: Is 2026 similar to 1998? My answer is no. The biggest difference between 1998 and 2026 is that Indonesia now operates under a flexible exchange rate regime,” he said on Monday. during the Grab Business Forum 2026 event in Jakarta.
Unlike the 1998 crisis when many firms held unhedged dollar debts, businesses today were better prepared to manage currency volatility, said Chatib, dismissing fears that a weaker rupiah could trigger a recession.
"People can debate whether growth will be 5.6 percent, 5.1 percent or 4.7 percent. Whatever the number, it is not negative growth," he emphasized, noting that a growth rate of 4.5 to 5 percent was still favorable compared to many economies facing global uncertainty.
He warned instead that the key issue facing the country was not economic fundamentals but confidence in fiscal management.
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Chatib noted that Indonesia's credit default swap (CDS) spread, a commonly used measure of sovereign risk, had been rising since January, well before the outbreak of the Iran war on Feb. 28.
