The series of economic policies recently launched by Indonesian President Prabowo have sparked widespread concerns among domestic and foreign investors, leading to severe fluctuations in the Indonesian stock market. The government has had to intervene urgently to stabilize the market. Prabowo's policies include large-scale populist spending, weakening the independence of the central bank, and taking tough measures against foreign companies, which have made investors uneasy about Indonesia's economic prospects.

Specifically, the Prabowo government plans to implement a costly projectThe $30 billion free nutritious meal plan is equivalent to 14% of the government budget. In addition, the government plans to expand the role of the military in the public sphere and adopt more aggressive policies towards foreign companies, such as measures targeting multinational corporations like Apple. These policies not only raise concerns among investors that the budget deficit may approach the legal limit of 3% of GDP, but also make them question whether these policies lack a solid economic foundation.

The Indonesian stock market reacted strongly to this. establishThe largest decline in over a decade has triggered the first trading halt since the outbreak of the COVID-19 pandemic.two thousand and twenty-fiveSince the beginning of the year, the Indonesian stock market hasThe withdrawal of $1.9 billion in funds shows the wavering confidence of investors in the Indonesian market.

In order to stabilize the market, the Indonesian central bank was forced to intervene to stabilize the Indonesian rupiah exchange rate. However, this has not completely alleviated investors' concerns. In addition, rumors that Indonesian Finance Minister Mu Yanni will be replaced in the cabinet reshuffle have intensified market anxiety, leading to further declines in the stock market. Although government officials and Mu Yanni herself have come forward to clarify, the rumors have had a substantial impact on the market.

Indonesia is currently facing multiple economic challenges. Externally, the possible threat from the United States and the weakening of China's demand for raw materials have put pressure on the Indonesian economy. Internally, investors are most concerned about Indonesia's fiscal prospects, especially the budget deficit issue. In the past, Indonesia's prudent economic management has improved its credit rating and investor trust, but Prabowo's policies may have a negative impact on this.