Economist: Market Welcomes Prabowo's Economic Speech Positively, Jakarta Composite Index Up 1.59 Percent

Jakarta – The stock market responded positively to the direction of economic policy conveyed by President Prabowo Subianto during the Annual Session of the People's Consultative Assembly (MPR RI) and the presentation of the 2027 State Revenue and Expenditure Budget Draft (RAPBN). The Jakarta Composite Index (IHSG) closed up 1.59 percent to 6,401 in Friday's trading (8/14/2026).

Trimegah Sekuritas Indonesia's Chief Economist, Fakhrul Fulvian, assessed that the market's response was in line with the increasingly clear direction of economic development being offered by the government for the coming years.

This is because the President's speech this year no longer simply positioned the State Budget (APBN) as the main instrument of development. The government has begun directing various economic forces — business, capital markets, the financial system, state-owned enterprises (BUMN), natural resources, and society — to move within a single growth ecosystem.

"In my view, this is a developmental-state speech. Not because the state wants to be the main player in all economic activity, but because the government is trying to ensure all the resources this nation has can move together toward the same goal — higher growth, wider employment, and more evenly distributed prosperity," Fakhrul said on Friday (8/14/2026).

Fakhrul noted that a number of policies presented by the President — ranging from DSI, the Danantara Development Management Fund, the Indonesia Financial Center, the Strategic Commodities Exchange, and the Gold Bank, to capital market reform — do not stand alone.

Taken as a whole, these policies reflect the government's effort to boost the productivity of economic resources and create greater domestic value-added. "Looked at individually, these policies seem separate. But viewed as a whole, they're all actually talking about the same thing — how Indonesia's economic resources can work more productively to create greater value for society," he said.

He said this direction matters because economic growth cannot rely on government spending alone. "In a modern economy, prosperity can't be built by the state budget alone. The government can lay the foundation, but investment, job creation, innovation, and business expansion still have to come from the private sector and society," he said.

On the fiscal side, Fakhrul assessed that the 2027 RAPBN's deficit target of around 2.4 percent of GDP shows the government is still trying to balance its development agenda with fiscal discipline.

Maintaining Investor Confidence

He said fiscal credibility remains one of the key factors in maintaining investor confidence. However, the market won't just be watching the size of the deficit. Investors will also be looking at how the government finances its development agenda, encourages private investment, and keeps Indonesia attractive amid global competition for capital. "The market always looks for a bigger story than just the deficit number. They want to know how growth will be created, how capital will flow in, and how businesses can gain the confidence to invest," Fakhrul said.

He also noted that strengthening state revenue needs to go hand in hand with expanding economic activity. "Ultimately, sustainable state revenue doesn't come from higher tax rates alone. Strong revenue comes from an economy that is bigger, more productive, and more transparent," he said.

Fakhrul noted that the key challenge after the President's speech is ensuring the private sector once again becomes a stronger engine of growth.

He said the government can act as a catalyst but cannot be the sole driver of the economy. Businesses need to be encouraged to invest again, expand production capacity, and create jobs. "The government can be a catalyst, but the government can't be the only engine of growth. Ultimately, the success of the economic growth target will be determined by how much the private sector reinvests, expands production capacity, and creates new jobs," he said.

Because of this, he said the various reforms the government has announced need to be translated into concrete, consistent, and predictable improvements to the business climate.

Another important point, he said, is the government's growing attention to the capital market. Fakhrul Fulvian said the capital market shouldn't be seen merely as a place to trade stocks, but as a source of long-term investment financing. "The capital market isn't just a place to trade stocks. It's a mechanism that connects public savings with productive investment. The deeper our capital market is, the greater Indonesia's capacity to finance long-term growth," he said.

He said exchange reform, stronger investor protection, development of the Indonesia Financial Center, and efforts to deepen and strengthen the reputation of the capital market are positive steps.

According to Fakhrul, from a capital-market perspective, the speech was one of the clearest President Prabowo has given on economic policy direction since his administration began in 2024. "From a capital market standpoint, this is Pak Prabowo's best speech during his 2024-to-now term, because of the clarity of direction — it gives the market a clear view of where the country's economic policy is headed," he said.

Fakhrul also highlighted policies aimed at optimizing economic potential that has not yet been fully productive.

He said Danantara Sumberdaya Indonesia (DSI) could be directed to ensure export foreign-exchange proceeds deliver greater benefit to the national economy, while the Gold Bank has the potential to integrate public gold ownership into the financial system.

Meanwhile, the Strategic Commodities Exchange, he said, could strengthen transparency while increasing the value-added of national commodity trade. "All three are essentially about how existing potential can work more productively," he said.

However, he cautioned that the success of these policies depends heavily on institutional quality, transparency, regulatory certainty, and business-sector participation.

While appreciating the broad direction laid out by the President, Fakhrul said market participants are now waiting for the next stage — an implementation roadmap. A clear vision, he said, needs to be translated into priorities, phases, and consistent policies in order to give investors and businesses certainty. "Investors and businesses usually don't just ask where we're headed. They also want to know how to get there, what the priorities are, and how each policy will translate into investment, jobs, and higher productivity," he said.

As such, he said, the government's challenge going forward is no longer simply formulating a development vision, but ensuring that vision is carried out through consistent and predictable policy.

Fakhrul Fulvian said the main message of the President's speech was an effort to mobilize the country's entire economic strength together. "In the end, development isn't about choosing between the state and the market. Development is about how all the resources this nation has can work together to improve the welfare of the people," he concluded.