Fresh doubts over Indonesia’s commitment to fiscal rules

Prabowo’s decision to sack Indonesia’s Finance Minister Purbaya at the start of the week initially raised hopes of a return to more orthodox policymaking, particularly after his replacement, Suahasil Nazara, reaffirmed the government’s commitment to the 3% of GDP deficit limit. But the reported reasons for Purbaya’s dismissal, together with parliament’s early discussions about loosening the 3% deficit ceiling, raise fresh doubts over Indonesia’s commitment to its strict fiscal rules.