He said the situation reflected serious problems in the governance of state-owned companies. Some SOEs, he argued, were operating without sufficient accountability to the state.
The President said he understood the intention behind such reporting but declined to identify the media outlet he was referring to.
State Secretary Prasetyo Hadi dismissed the reports ahead of a plenary cabinet meeting at the Presidential Palace in Jakarta on Monday.
President Prabowo Subianto says Indonesia does not need to borrow from the International Monetary Fund (IMF), arguing that the country remains financially strong without the loans.
But an economist has questioned whether that position is realistic given the government’s current revenue, which remains insufficient to finance its ambitious development plans.
Y. Sri Susilo, a lecturer at the Faculty of Business and Economics at Universitas Atma Jaya Yogyakarta, said Indonesia would still need borrowing to fund public infrastructure as tax revenues alone are not enough.
“As long as the Indonesian government continues to build public infrastructure, borrowing will still be needed because tax revenues are not yet sufficient to finance it,” Sri told Suara.com on Tuesday (1 September 2026).
He said foreign borrowing had historically played a role in financing and maintaining vital public infrastructure, including roads, ports, dams, hospitals and schools.
The question, he said, was what would replace IMF financing if the government was determined to keep the institution at arm’s length.
“If President Prabowo is indeed rejecting loans from the IMF, he should already have alternative sources of foreign borrowing outside the IMF,” Sri said.
Caution over state-owned banks
Sri also warned against relying too heavily on Indonesia’s banking sector, particularly state-owned banks, to fill gaps in government financing.
The concern comes as the government places state-owned banks, known collectively as Himbara, under the management of Danantara, Indonesia’s sovereign wealth and investment agency.
Sri said banks should not be pressured into becoming a source of government financing without considering the risks to their businesses and the principles of prudential banking.
“Banks — whether state-owned, private, regional development banks or rural banks — must uphold the principle of prudence when providing credit,” he said.
Credit decisions, he added, should be based on careful and accurate feasibility assessments.
At the same time, Sri said subsidised lending programmes for small and medium-sized businesses should continue.
Programmes such as Indonesia’s Kredit Usaha Rakyat (KUR), he said, remain important because they allow small businesses to access financing at more affordable rates.
“Subsidised lending to MSMEs must continue so that they can benefit from affordable credit,” he said.
