“Tidbits From TNT” Friday 2=6=2-26

TNT:

Tishwash:  Indonesia's historic growth exceeds expectations amid geopolitical challenges and currency pressures

According to official figures released on Thursday, the Indonesian economy experienced a strong recovery in 2025, becoming the largest economy in Southeast Asia with a growth rate of 5.11 percent, surpassing the previous year's performance and achieving the fastest annual growth rate since 2022, thanks to a combination of strong consumer spending and massive investments. 

These results were driven primarily by an exceptional performance in the last quarter of the year, which recorded growth of 5.39 percent, exceeding analysts’ expectations of only 5.01 percent, as a result of the financial stimulus packages injected by the government worth more than 16 trillion rupees, which included direct support measures such as rice distribution and tax exemptions for the tourism sector.

Despite these positive figures, which bolster President Prabowo Subianto's ambitions to achieve 8 percent growth by 2029, the landscape is not without significant challenges, including international trade tensions, US tariffs, and declining foreign investor confidence.

This growth coincided with shifts in fiscal and monetary policy, including a 150-basis-point interest rate cut and a leadership change at the Ministry of Finance, with Purbaya Yodi Sadiwa replacing Sri Mulyani Indrawati.

This move triggered market turmoil, leading to capital outflows and a record low for the rupee against the dollar due to concerns about transparency and the budget deficit.

While the government is targeting 5.4 percent growth for 2026, relying on sovereign wealth fund investments and public spending programs, skeptical voices from economists and local research centers are emerging, pointing to a gap between official data and the reality on the ground.

Their doubts are based on contradictory indicators such as declining tax revenues, stagnant foreign investment, falling car sales, and a contraction in industrial activity, in addition to reports of layoffs that may suggest the announced household spending figures are inflated and do not reflect the true economic situation of citizens.  link

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Tishwash: The Central Bank Governor discusses with the American side support for monetary stability.

The Governor of the Central Bank of Iraq, Mr. Ali Mohsen Ismail Al-Alaq, received the Chargé d'Affaires of the United States Embassy in Iraq, Mr. Josh Harris. They discussed prospects for strengthening the strategic partnership between the two countries and emphasized the importance of supporting monetary and economic stability, in line with the requirements for political and security stability in Iraq.

For his part, the Governor expressed his gratitude for the continued support provided by the United States, represented by the Treasury Department and the Federal Reserve, particularly during the quarterly meetings.

He also reviewed the banking reform plan and the notable progress made in stabilizing foreign exchange transactions and regulating dollar sales according to best practices and international standards.

At the conclusion of the meeting, Mr. Harris expressed his full readiness to continue supporting the efforts of the Central Bank of Iraq, enabling it to achieve its goals in promoting financial and monetary stability.

Central Bank of Iraq, 
Media Office, 
February 5, 2026    link

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Tishwash:  The general budget law: Can it be issued in the event of a constitutional vacuum?

A financial advisor confirmed that the 2026 budget law can be issued in the event of any constitutional vacuum, after consulting the opinion of the Supreme Federal Court.

The Prime Minister’s financial advisor, Mazhar Muhammad Salih, explained on Thursday that government spending will continue according to the (1/12) rule until the 2026 budget is approved, while noting that the monthly salaries of employees, retirees and welfare amount to 8 trillion dinars.

Continuation of fiscal policy

Saleh said : “The fiscal policy has been carrying out its duties since the second month of this year 2026 in accordance with the provisions of the amended Federal Financial Management Law No. (6) of 2019, by spending at a rate of (1/12) of the actual current public expenditures for the year 2025.”

He explained that “public finances benefit from the provisions of paragraph (29) of the aforementioned law, which allows the financial authority to adopt temporary financing mechanisms and liquidity management in the event that spending cannot be carried out according to the legally legislated regular budget.”

He added that “the aforementioned provisions confirm the principle of temporary financing in the event of a delay in the approval of the budget law or a temporary shortage of liquidity necessary for spending. This allows the Ministry of Finance to take transitional financial measures that ensure the continued disbursement of priority expenditures without delay. Foremost among these are salaries, wages, pensions and social welfare allocations, which are estimated at about eight trillion dinars per month.”

The possibility of issuing the general budget law

Regarding the possibility of legislating the budget law in the event of a failure to elect a president, Saleh explained that “this is a rare occurrence, but it may impose itself due to the necessities of the supreme national interest, especially since the House of Representatives is the constitutional body competent to legislate the budget law. In this context, the possibility of issuing the 2026 budget law can be considered after consulting the opinion of the Supreme Federal Court, as it is a constitutional court specializing in resolving the problems of parliamentary sessions, especially in cases of the complete absence of the president.”

He also pointed out that “the President of the Republic, Abdul Latif Jamal Rashid, and the Prime Minister, Mohammed Shia Al-Sudani, are still in a position of legal responsibility at the moment, which allows, in principle, the request to prepare a draft of the federal general budget law and submit it to the House of Representatives to begin the legislative process, if the elected legislative authority wishes to do so.”  link

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