VIEW: Goldmans Expects “Broad Policy Continuity” Following Prabowo Win

The “quick counts” point to the defence minister Prabowo winning the presidential election with about 58% of the vote, in line with recent opinion polls. Official results will be released before March 20. Goldman Sachs recommends monitoring his cabinet make up and any reshuffling of alliances to give Prabowo a majority government.

• “The turnout for this year's election was higher at ~85% vs. 82.8% in 2019 and just 69.6% in 2014. … Detailed provincial data has not yet been released, but available data suggests that Prabowo is likely to receive more than 20% votes in most provinces.”
• “To rule effectively, the new president will also need to gain a majority in the parliament. Based on data from Kompas reporting, Prabowo’s coalition is likely to gain 40%-50% of the legislative seats. Based on pre-election party lines and the ballot counted so far, this would suggest minority government support. However, a reshuffling of coalition partners could happen following the announcement of official results -- as seen after the 2019 presidential elections.”
• “If presidential candidate Prabowo Subianto wins in the first round, we expect broad policy continuity, with a potentially looser fiscal stance compared to the current administration. However, as the 3% of GDP fiscal deficit limit is unlikely to be changed in the short to medium term, the new administration has to realize higher revenue targets to deliver on the more costly campaign promises (e.g. free school lunches).”