Respected Indonesian finance minister got an hour’s notice of sacking, say sources

JAKARTA – Indonesian Finance Minister Sri Mulyani Indrawati was chairing a meeting with top ministry officials when she received a call from President Prabowo Subianto’s office informing her she would be replaced within an hour, two sources said, underscoring the abruptness of the long-time finance czar’s sacking.

Dr Sri Mulyani, known for her cautious steering of South-east Asia’s largest economy that won the confidence of markets, was widely regarded as one of the few checks on Mr Prabowo’s big growth and spending promises that had unnerved many investors.

Mr Prabowo kept her on when he took power in 2024 in a signal of policy continuity from the largely stable reign of his predecessor, but the relationship came to a sudden end less than a year in.

Two sources with direct knowledge of events leading up to

Dr Sri Mulyani’s ousting

on Sept 8 told Reuters on condition of anonymity that she was in a meeting after 2.30pm when she received a call from one of Mr Prabowo’s closest aides.

The official announcement came less than an hour later that she had been replaced by

economist Purbaya Yudhi Sadewa

.

“She was supposed to have a (meeting) agenda with the President in the morning that day, but it was cancelled,” said one of the sources, who is close to Dr Sri Mulyani.

Dr Sri Mulyani and the President’s office did not immediately respond to Reuters’ requests for comment.

It had previously been unclear if she resigned or was removed. The sources, both close to the ousted minister, one of whom was in the ministry, confirmed that Dr Sri Mulyani was asked to leave.

One more government source confirmed that she did not resign, but did not comment on the chain of events.

Market stability

Dr Sri Mulyani and Mr Prabowo were peers in the Cabinet of President Joko Widodo from 2019 to 2024, with the latter serving as defence minister.

One of the sources said Mr Prabowo only hired Dr Sri Mulyani because of a push from three former presidents and to give stability to the markets.

They said Dr Sri Mulyani’s prudent approach was at odds with Mr Prabowo’s big spending plans, with projects such as the ambitious – and expensive – free meals programme for 82.9 million Indonesians.

The programme will get a massive boost with a US$20.7 billion (S$26.5 billion) budget in 2026 – almost double that in 2025 – while other areas such as funding for regional governments were cut to control the fiscal deficit.

While Dr Sri Mulyani – who served under three presidents across two stints as finance minister – tried to accommodate Mr Prabowo’s policies, the two barely met, the source said, as communication with the President had become increasingly difficult.

The sources told Reuters Dr Sri Mulyani was shaken after one of her homes was looted during two weeks of protests and unrest against government spending priorities and tax plans.

Mr Prabowo asked during a Cabinet meeting if she was okay after the looting and she responded in the affirmative and continued in the role, two sources said, adding everything ran normally until Sept 8.

Fiscal differences?

While it was unclear why Dr Sri Mulyani was replaced, economists believe the two did not see eye to eye on fiscal matters.

Earlier in 2025, Mr Prabowo established a new sovereign wealth fund and appointed high-profile advisers known for risk-taking in business and investment, with the aim of strategically leveraging more of its assets to spur growth.

A source in the fund, who declined to be identified, said at least one adviser told Mr Prabowo that Dr Sri Mulyani’s fiscal conservatism was not compatible with higher growth targets.

Indonesian law says the fiscal deficit cannot exceed 3 per cent of gross domestic product – a safeguard against the kind of economic instability that rocked the country in the late 1990s under authoritarian leader Suharto.

While that law has long been respected – particularly under Dr Sri Mulyani – many detractors see fiscal conservatism as a growth impediment, including Mr Prabowo, who had said before taking office that Indonesia could take on more debt. REUTERS