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Ron Vachris said Costco’s value message is resonating “against the backdrop of ongoing macro uncertainty,” highlighting fuel as the standout: “The result was record-breaking volumes, all 3 4-week fiscal periods of the quarter
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Indonesian President Prabowo Subianto unveiled ambitious economic growth and fiscal deficit targets for 2027 while promising reforms aimed at restoring investor confidence and strengthening state institutions. The announcement comes after months of market concerns over government spending plans, policy uncertainty, and weakening confidence in Southeast Asia’s largest economy.
Prabowo outlined a growth target of 5.8 percent to 6.5 percent for next year while aiming to lower the fiscal deficit to between 1.8 percent and 2.4 percent of gross domestic product. The government also expects inflation to remain under control and pledged to improve food security and attract greater investment.
Indonesia has faced growing scrutiny from investors and rating agencies this year. Credit rating outlooks were downgraded due to concerns about policymaking credibility, fiscal discipline, and transparency. Market fears intensified after discussions around possible changes to the country’s long standing fiscal deficit ceiling and rising state spending commitments.
Prabowo confirmed plans to establish a new state agency to oversee exports of major commodities including coal, palm oil, and nickel. The government says the move is intended to reduce revenue losses and strengthen national control over natural resources, but investors worry it could disrupt pricing systems and reduce private sector profitability.
Despite increasing state involvement in strategic sectors, Prabowo stressed that Indonesia still welcomes private companies and small businesses as partners in economic development. He called for cooperation between the government and the private sector to achieve long term prosperity.
Indonesia’s latest economic strategy reflects a balancing act between ambitious state led development goals and the need to maintain investor confidence. While the government aims to accelerate growth and strengthen control over key resources, markets remain cautious about rising fiscal risks and unpredictable policy changes.
The proposed commodity export agency could significantly reshape Indonesia’s role in global resource markets because the country is one of the world’s largest exporters of coal and palm oil. However, stronger government intervention may create uncertainty for foreign investors and commodity traders.
At the same time, maintaining fiscal discipline will be critical as Prabowo moves forward with large welfare programmes and economic reforms. The success of his agenda will likely depend on whether the government can reassure markets while delivering growth, stability, and stronger institutional credibility.
With information from Reuters.
Hungary’s state-heavy ‘Orbánomics” is officially over. Enter Péter Magyar, who wishes to ‘mend relations’ with the EU.
Now that Péter Magyar has taken office as Hungary’s new prime minister, he will look to András Karman, his nominee for finance minister, to execute a rapid fiscal pivot, dismantling 16 years of state-heavy “Orbánomics” and restoring investor confidence in the Central European hub.
Real GDP is expected to grow by 1.7% to 2.3 % this year, with average consumer prices rising 3.8% and the unemployment rate at 4.2%, according to the International Monetary Fund’s April World Economic Outlook.
The outgoing government of Viktor Orbán did not give Karman much to work with, as the first-quarter cash-flow deficit reached 3.4 trillion forints ($11.3 billion). At 80% of the full-year target, leaving the incoming administration with negligible fiscal headroom.
“[Former Prime Minister Viktor] Orbán has always regarded fiscal order as equal with neoliberal ideology or austerity attitude, or ‘something the Left does in office,’” says Péter Ákos Bod, professor emeritus in the Department of Economic Policy at Corvinus University of Budapest and former governor of the Central Bank of Hungary.
Growth is picking up after a three-year post-pandemic stall. Fitch Ratings now projects GDP to rise by 2.3% this year and 2.6% in 2027, driven by a rebound in domestic demand and heavy investment in the auto and battery sectors.
However, fiscal risks persist. While inflation is cooling toward 3.5%, the deficit widened to 5% last year and is expected to hit 5.6% in 2026. This “fiscal slippage” led Fitch to issue a negative Sovereign Outlook in December, signaling the narrow window Karman has to stabilize the books.
A life-long banker, Karman’s immediate task will be to free approximately €17 billion in EU Cohesion Funds and a Recovery and Resilience Facility, which have been frozen since late 2022.
“While the funds ostensibly hinge on meeting 27 ‘super milestones’ around judicial independence, anti-corruption, and procurement transparency,” said Sili Tian, a Central and Eastern Europe analyst at the Economist Intelligence Unit. “We expect a relatively quick disbursement as Mr. Magyar seeks to quickly mend relations with the EU.”
That may be difficult to achieve, he said, as many Orbán loyalists are entrenched across the bureaucracy, the tax authority, the judiciary, and Hungary’s largest enterprises, some with tenure into the 2030s.
Longer-term goals, such as exiting the EU’s Excessive Deficit Procedure, will require Hungary to reduce its budget deficit and its debt-to-GDP ratio. The process will likely take longer than the incoming government’s four-year term.
Justin Keay contributed to this article.
A new International Monetary Funds report says higher copper production and prices support Chile’s growth expectations, but warned of risks that include the crisis in the Middle East, rising oil prices and loss of domestic competitiveness tied to the sharp public spending cuts. File Photo by Mario Ruiz/EPA
SANTIAGO, Chile, May 8 (UPI) — An economic reform plan Chilean President José Antonio Kast announced to revive the country’s economy is drawing criticism over its potential short- and medium-term fiscal impact, as the International Monetary Fund lowered its growth projections for Chile.
The IMF’s World Economic Outlook report had estimated in mid-April that Chile’s gross domestic product would grow 2.4% in 2026 and 2.6% in 2027. However, the organization said this week it revised those projections to 2.2% this year and 2.5% in 2027 if external conditions and the country’s fiscal situation improve.
“Economic activity, driven by investment and exports in 2025, faces a period of heightened uncertainty,” the IMF said.
The report said higher copper production and prices support growth expectations, but warned of risks that include the crisis in the Middle East, rising oil prices and loss of domestic competitiveness tied to the sharp public spending cuts promoted by Kast.
The Chilean president’s plan includes proposals to reduce corporate taxes and cut bureaucracy in an effort to stimulate private investment. Congress is discussing tha proposal.
“Amid persistently high inequality, social discontent also remains a risk,” the IMF report said.
The IMF is not the only institution warning about the risks associated with the government’s National Reconstruction Plan.
Chile’s Autonomous Fiscal Council, an independent public agency tasked with monitoring the sustainability of fiscal policy, warned about the proposal’s possible impact on the country’s fiscal balance and public debt.
“The project commits fiscal spending with a high degree of certainty in the short term and reduces permanent revenue, while the positive effects depend on more uncertain future income associated with growth, which could lead to a deterioration in the fiscal balance if growth does not materialize at the estimated magnitude and speed,” the council said.
Jaime Bastías, director of the auditing school at Finis Terrae University, told UPI the IMF’s downgrade was “absolutely” expected because Chile’s central bank had already made a similar adjustment, while debate over financing the government’s proposal continues to intensify.
“The government’s plan can be an engine that helps us face the storm we are going through, but that is heavily conditioned on the state maintaining orderly public finances. The IMF says that if the proposed tax cuts are not offset through other channels, the country’s debt will grow too much, and that will create another problem,” Bastías warned.
Carlos Smith, a researcher at the Center for Business and Society Research at Universidad del Desarrollo, told UPI the IMF report shows that both external and domestic factors are likely to weaken household income and affect consumer spending.
“Consumption is one of the main drivers of Chile’s GDP. The IMF expects it to contract and that is already beginning to show, along with a very weak labor market. Chile is in a much weaker condition,” he said.
Smith said that although the IMF lowered its growth forecasts, the organization still appears optimistic about the long-term positive impact of the government’s proposed reforms.
“The impact will materialize more slowly than the finance minister expects. Therefore, the IMF is suggesting more efficient alternatives such as lower costs or more limited subsidies to create new jobs,” Smith said.
He added that while Ciles should adjust some aspects of the reform, he believes the plan is still moving in the right direction.
“I agree with the IMF that the proposal needs refinement and should focus on removing obstacles to investment projects without lowering the standards of our legislation or environmental protections. If that is achieved, I believe there is a possibility of reaching 3% growth by the end of the decade,” he said.
Bastías agreed, saying Chile could grow at 3% by 2030 if copper prices remain high, production increases and more private investment arrives.
“It is an optimistic scenario where we need to focus on stimulating those three factors. If that favorable future does not materialize, we will all pay the costs,” he said.