Indonesia's ex-finance minister sacked with one hour's notice: sources

Indonesia’s former finance minister Sri Mulyani was removed from her post with less than an hour’s notice during a meeting on September 8, 2025, according to sources familiar with the situation.

Sri Mulyani, who led the ministry under three Indonesian presidents and was retained for continuity by President Prabowo Subianto last year, was replaced by economist Purbaya Yudhi Sadewa.

Sources told Reuters that the dismissal was abrupt and that Sri Mulyani was asked to leave, not resigning voluntarily.

Differences over fiscal policy reportedly contributed to the decision, with Sri Mulyani’s cautious approach clashing with Prabowo’s plans for increased spending, including a US$20.7 billion free meals program in 2026.

The president’s office and the former minister did not respond to requests for comment.

Prabowo has recently prioritized higher growth and new investment strategies, which some advisers said conflicted with Sri Mulyani’s fiscal conservatism.

Separately, Indonesian news outlet Tempo.co previously reported that Sri Mulyani wanted to resign, but Prabowo denied her request.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Indonesia shows recurring pattern of finance minister-president conflicts over fiscal discipline

Sri Mulyani’s abrupt removal mirrors her previous dismissal in 2010, when she resigned after political conflicts over her anti-corruption reforms that targeted powerful figures2.
In 2010, she dismissed over 150 finance ministry personnel for corruption and penalized nearly 2,000 others, creating tensions with coalition partners who preferred accommodating corrupt practices2.
The current removal follows similar dynamics; her fiscal conservatism clashed with Prabowo’s ambitious spending plans, including a $20.7 billion free meals program for 82.9 million Indonesians1.
Both departures triggered immediate market reactions, with the 2010 resignation causing declines in the Indonesian stock market and rupiah, demonstrating consistent investor reliance on her stabilizing influence2.
The pattern suggests institutional tensions between technocratic fiscal management and political demands for growth-oriented spending remain unresolved in Indonesian governance.

Markets consistently view finance minister stability as critical economic indicator

Sri Mulyani’s removal after just one hour’s notice highlights how her role was seen as essential for market confidence, given she was “widely regarded as one of the few checks on Prabowo’s big growth and spending promises”1.
Indonesia’s legal framework requires the fiscal deficit cannot exceed 3% of GDP—a safeguard established after the economic instability of the late 1990s under Suharto—and this constraint has been “long respected, particularly under Sri Mulyani”1.
Her international recognition, including being named ‘Finance Minister of the Year’ by Euromoney in 2006 and inclusion in Forbes’ ‘100 Most Powerful Women’ list, reinforced her credibility with global investors2.
The immediate market concern following both her 2010 and 2025 departures demonstrates how emerging market investors view respected technocratic leadership as a key risk management factor for sovereign investment decisions.