Indonesia's Parliament to Review Fiscal Law Amendments

On May 25, a senior Indonesian parliamentarian announced that the parliament is set to begin reviewing amendments to the national fiscal law, with no immediate focus on altering the fiscal deficit cap rules. According to Jin10, investors are closely monitoring Indonesia's fiscal sustainability due to President Prabowo Subianto's extensive spending plans, particularly whether related rules will be modified. Currently, the law stipulates that the annual budget deficit must not exceed 3% of GDP, and public debt must remain below 60%. Fitch Ratings, one of the two agencies that downgraded Indonesia's credit rating outlook this year, cited potential changes to the fiscal and debt cap rules in the national fiscal law as a factor in its outlook adjustment. Muhammad Misbakhun, Chairman of the Indonesian Parliament's Finance Committee, stated that lawmakers will soon begin drafting a comprehensive bill to amend several existing financial laws in conjunction with the establishment of the new sovereign wealth fund, Danantara. When asked about the possibility of adjusting fiscal rules, he told reporters, 'We have not reached that point yet.'