The day of Finance Minister Purbaya Yudhi Sadewa’s appointment could not have been more dramatic. 

On that Monday, the rupiah fell more than 1 percent to Rp 16,483 per United States dollar and risked sliding further without intervention from Bank Indonesia. The stock market dropped 1.3 percent, then another 1.8 percent to Rp 7,628 per dollar, signaling large foreign outflows.

The market reaction symbolized the loss of trust built by former finance minister Sri Mulyani Indrawati in safeguarding fiscal stability. During her tenure, she kept the budget deficit below 3 percent of gross domestic product, except during the COVID-19 pandemic, and maintained government debt below 40 percent of GDP, while ensuring that the government could still fund its priority programs such as the free nutritious meal program, rural cooperatives and the establishment of state asset fund Danantara.

The appointment of Purbaya as the new finance minister has brought mixed expectations. There is hope he could deliver the much-needed fiscal reforms to stimulate growth. Or he might confirm market fears that he is a risk to fiscal discipline, threatening macroeconomic stability in the near to medium term. 

Much will depend on how his policies shape economic conditions.

There are some macroeconomic numbers to watch carefully, as they will show whether Purbaya can reassure markets and maintain stability heading into 2026.

First is to maintain a deficit for the 2025 budget under 3 percent and commit to do so for 2026 budget. Since President Prabowo Subianto’s election, the state budget has undergone significant efficiency measures at both the national and regional levels to fund priority programs.