Indonesia's New Finance Minister Faces Fiscal Deficit Challenge

Indonesia's new finance minister, Suahasil Nazara, is seen as policy-positive by OCBC economists due to his technocratic background and extensive policymaking experience. His main challenge will be to keep the fiscal deficit below the 3% of GDP ceiling, which could be complicated by the need to balance President Prabowo's growth ambitions against limited fiscal space and a tough external environment. The fuel subsidy bill could reach as much as 1.1% of GDP, necessitating expenditure cuts.