Two years of Prabowonomics, weighed up by an economist in Melbourne

Indonesia's official figures say the economy is growing above 5 per cent. In the same two years the rupiah has fallen past 18,000 to the dollar, a record low, and the stock market has had its steepest fall since the Asian financial crisis. Bhima Yudhistira Adhinegara, writing for Indonesia at Melbourne, says both pictures cannot be true. He points to one quarter when manufacturing was reported growing 5.68 per cent, while the PMI, a monthly survey that asks factory managers whether orders are rising or falling, showed factories shrinking and 150,000 layoffs were recorded. Part of the gap, he argues, is accounting: imported defence equipment counted as local factory output, and industrial park figures counted twice.

For most households the argument is simpler than the statistics. In a CELIOS survey he cites, 78 per cent named the price of staple food as their biggest worry, ahead of jobs and worker protection at 58 per cent. He puts some of that down to MBG, the free nutritious meals program, which buys rice, chicken, eggs and vegetables in the same traditional markets families use, so the extra demand pushes prices up. The money has to come from somewhere, and about 82 per cent told the same survey that taxes are already too high.

Two numbers in the piece matter more than the headline growth rate. Transfers to regions, the money Jakarta sends to provinces and districts, drop from 24.49 per cent of national spending in the 2025 outlook to 17.17 per cent in the 2026 budget, which has already brought civil servant protests and local tax resistance in Pati. And the Red and White Village Cooperatives are repaying state bank loans using Village Funds. If the cooperatives fail, the loss lands on the banks rather than on the budget, which is why he treats it as a risk to financial stability. In the survey, 66 per cent of the public and 91 per cent of experts reject the program.

Why it matters

If you shop in a traditional market, the free meals program is bidding against you for the same chicken and eggs, which is one reason your bill keeps climbing while growth is reported as healthy. If you live outside Java, the cut to regional transfers is the figure to follow, because it decides whether your district can pay for roads, clinics and staff next year. And if your savings sit in a state bank, the cooperative loans are a slow risk worth knowing about.