Jakarta, June 12 (WorldPulse) — Hundreds of university students gathered in Indonesia’s capital on Sunday to protest a recent hike in fuel prices and what they described as imprudent state spending, saying the combination threatens to drive the nation toward bankruptcy.
The demonstrators, many carrying banners that read “Stop wasteful spending” and “Fuel for the people, not for politicians,” converged on the National Monument (Monas) before moving to the presidential palace grounds. Organisers said the protest was sparked by the government’s decision to raise the subsidised price of gasoline by 15 percent, a move that follows a series of fiscal measures aimed at reducing the budget deficit.
Indonesia’s budget deficit has widened to roughly 6.5 percent of GDP, according to the Ministry of Finance, prompting officials to cut subsidies and increase taxes on fuel and electricity. Analysts say the fiscal tightening is intended to shore up Indonesia’s sovereign credit rating, which has been under pressure from rising external debt and a slowdown in export growth.
“The government is focusing on debt servicing while ordinary citizens struggle to afford basic necessities,” said one student activist who asked to remain anonymous. “If the state continues to spend recklessly on projects that do not generate returns, we risk a fiscal collapse.”
Government spokespeople, however, defended the policy, arguing that the price adjustment is a necessary step to end years of unsustainable fuel subsidies that cost the state budget over $30 billion annually. A senior official from the Ministry of State-Owned Enterprises told reporters that recent infrastructure spending is aimed at long‑term economic growth and will ultimately reduce the fiscal gap.
Political analysts note that the protest highlights a growing rift between a youthful electorate and an administration that has relied on stimulus spending during the pandemic. “Indonesia’s demographic dividend is turning into a liability if the government cannot align fiscal policy with the population’s expectations,” said a Jakarta‑based economist.
The demonstration ended peacefully after authorities promised a dialogue with student representatives. Observers say the government’s response could set a precedent for how Indonesia manages public dissent over economic policy as it navigates a fragile recovery and looming global uncertainties.