Finance Ministry Says World Bank Fails to Grasp Indonesia's Fiscal Policy

October 9, 2025 | 02:53 pm

TEMPO.CO, Jakarta - The Director-General of Economic and Fiscal Strategy at the Indonesian Ministry of Finance, Febrio Kacaribu, said that the World Bank lacks a comprehensive understanding of the government's fiscal policies and stimulus measures. He made these remarks in response to the international institution's projection, which states that Indonesia's economic growth this year will only reach 4.8 percent, below the government's target of 5.2 percent.

"The World Bank does not fully understand our fiscal policies. Therefore, their predictions are valuable as input, but of course, they differ from our calculations, which have taken into account various stimuli and growth engines," Febrio said during a media briefing at the Ministry of Finance's Directorate General of Taxes office in Jakarta on Thursday, October 9, 2025.

Febrio believes that the World Bank's projection does not fully reflect the national fiscal conditions and policies. He noted that the institution has not considered the dynamic fiscal policies that will be in place until the end of this year.

According to the October 2025 edition of the World Bank's East Asia and Pacific Economic Update, cited in Antara, Indonesia's economic growth is projected to be 4.8 percent in 2025, which is a slight increase from the previous estimate of 4.7 percent.

The World Bank's report also highlighted Indonesia's fiscal challenges. Government spending is still dominated by subsidies for food, transportation, and energy, as well as state-driven investments.

In response, Febrio stated that the government has prepared several fiscal measures, such as distributing stimulus and placing government funds in banks. Through these policies, he expressed optimism that Indonesia's economic growth in 2025 can reach 5.2 percent.

Febrio added that the World Bank's analysis has not fully taken into account the current government policies, one of which is the placement of a government cash fund of Rp200 trillion in the national banking sector to encourage credit distribution and economic growth. "Do you think the World Bank knows about the placement of Rp200 trillion? No, right?" Febrio said.

He further stated that the government will continue to manage fiscal policies carefully and adaptively to maintain stability while strengthening national economic growth. According to Febrio, institutions such as the World Bank, the IMF, and the OECD often make inaccurate projections because they fail to consider dynamic policy measures.

"If you look, their projections have always been off in recent years. But it's also good, it means they are paying attention to Indonesia's economy," he said.

However, he stated that the government is open to input provided by various international institutions. According to him, these projections serve as a basis for other countries to make investment decisions in Indonesia.

Febrio said that the government will continue to showcase potential sectors for investment and provide policy support to strengthen the business climate. "The more international institutions that are interested, the better. We demonstrate the opportunities in strategic sectors, and they can participate in the investment," he said.

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