Indonesia's fiscal policy after the pandemic has been characterized by a cautious approach to manage budget deficits and support economic stability. The government aimed to narrow the budget deficit to ease financing pressures, while the central bank implemented contractionary monetary policy by raising reserve requirements and policy rates. Economic growth slowed from 5.3% in 2022 to 5.0% in 2023 due to weaker global demand and limited policy support. The government's conservative approach in 2023 resulted in a primary balance surplus, a narrower budget deficit, and a lower government-debt ratio. However, challenges remain, including low tax revenue and the need for improved tax policy and administration. The government has also focused on infrastructure development through 'below-the-line spending' and has faced pressure from state-owned enterprises (SOEs) due to imprudent management and financial infeasibility of some projects. Additionally, Indonesia's long-politicized energy subsidies have been ineffective and distortive, requiring transformation into targeted social assistance programs. The article discusses Indonesia's fiscal policy and economic dynamics post-pandemic, highlighting key responses in 2022–23. It analyzes economic performance, inflation, the external sector, and the banking and financial sector, as well as progress in welfare indicators. The article also examines the impact of social expenditure on citizens' well-being and poverty alleviation, along with Indonesia's fiscal policy trajectory for 2024 and upcoming challenges. The global economic landscape has been turbulent, with high interest rates and geopolitical tensions. Supply chain disruptions and inflationary pressures have led to aggressive monetary tightening in advanced economies. Emerging markets have faced financial market turmoil, capital outflows, and rising borrowing costs. Geopolitical tensions have increased, affecting global economic activity. Indonesia's economy grew at 5.05% in 2023, with domestic consumption as the main driver. Inflation moderated to 2.6% in December 2023, within the government's target range. The external sector has strengthened, with a current account surplus and increased exports of nickel products. The banking sector remained robust, with low credit risk and adequate liquidity. The government has taken a cautious approach to fiscal policy, aiming for a deficit of 2.84% of GDP in 2023. The 2024 budget aims to address short-term and medium- to long-term challenges, including the 'three gaps': human capital, infrastructure, and institutional gaps. The government seeks to reduce these gaps to enable structural transformation and sustainable development. The fiscal policy stance for 2024 is conservative, with a focus on maintaining fiscal sustainability and addressing economic challenges.Indonesia's fiscal policy after the pandemic has been characterized by a cautious approach to manage budget deficits and support economic stability. The government aimed to narrow the budget deficit to ease financing pressures, while the central bank implemented contractionary monetary policy by raising reserve requirements and policy rates. Economic growth slowed from 5.3% in 2022 to 5.0% in 2023 due to weaker global demand and limited policy support. The government's conservative approach in 2023 resulted in a primary balance surplus, a narrower budget deficit, and a lower government-debt ratio. However, challenges remain, including low tax revenue and the need for improved tax policy and administration. The government has also focused on infrastructure development through 'below-the-line spending' and has faced pressure from state-owned enterprises (SOEs) due to imprudent management and financial infeasibility of some projects. Additionally, Indonesia's long-politicized energy subsidies have been ineffective and distortive, requiring transformation into targeted social assistance programs. The article discusses Indonesia's fiscal policy and economic dynamics post-pandemic, highlighting key responses in 2022–23. It analyzes economic performance, inflation, the external sector, and the banking and financial sector, as well as progress in welfare indicators. The article also examines the impact of social expenditure on citizens' well-being and poverty alleviation, along with Indonesia's fiscal policy trajectory for 2024 and upcoming challenges. The global economic landscape has been turbulent, with high interest rates and geopolitical tensions. Supply chain disruptions and inflationary pressures have led to aggressive monetary tightening in advanced economies. Emerging markets have faced financial market turmoil, capital outflows, and rising borrowing costs. Geopolitical tensions have increased, affecting global economic activity. Indonesia's economy grew at 5.05% in 2023, with domestic consumption as the main driver. Inflation moderated to 2.6% in December 2023, within the government's target range. The external sector has strengthened, with a current account surplus and increased exports of nickel products. The banking sector remained robust, with low credit risk and adequate liquidity. The government has taken a cautious approach to fiscal policy, aiming for a deficit of 2.84% of GDP in 2023. The 2024 budget aims to address short-term and medium- to long-term challenges, including the 'three gaps': human capital, infrastructure, and institutional gaps. The government seeks to reduce these gaps to enable structural transformation and sustainable development. The fiscal policy stance for 2024 is conservative, with a focus on maintaining fiscal sustainability and addressing economic challenges.