• President Prabowo Subianto affirms commitment to the $32 billion Nusantara capital city project.
• This marks Prabowo's first overnight stay in Nusantara as president.
• Analysts express concerns over funding capabilities amidst a budget deficit.
• Infrastructure development is on track, with a target completion date of 2028.
• The Constitutional Court has restricted land rights for investors, complicating progress.

Indonesia's President Prabowo Subianto reiterated his commitment to the ambitious $32 billion project aimed at building the country's new capital city, known as Nusantara. This declaration came during his first overnight visit to the site since taking office in October 2024, signaling a pivotal moment for the project as lingering questions had surrounded its future due to his predecessor's unfinished plans, according to Reuters, South China Morning Post, and The Jakarta Post.

The Nusantara capital city project is significant as it aims to relocate the capital from Jakarta to a more sustainable location on Borneo Island, some 1,200 kilometers away. Former President Joko Widodo first initiated this plan in 2019, although construction has faced delays, only beginning in 2022 after the COVID-19 pandemic impacted operations. Prabowo's visit aimed to bolster confidence in the progress and sustainability of the venture, according to Reuters and The Jakarta Post.

Despite the optimistic outlook, there are concerns regarding funding the capital project. Analysts suggest that Prabowo may struggle to balance financial resources to support both the Nusantara development and other governmental objectives, especially in light of a budget deficit projected at 2.92% of GDP in 2025. This fiscal challenge raises doubts about the feasibility of maintaining development momentum while fulfilling critical economic commitments, according to South China Morning Post and The Jakarta Post.

The Nusantara National Capital Authority announced that the development's initial stage is progressing, with the executive branch's offices and infrastructure nearing completion. There are plans for the completion of legislative and judicial government buildings by 2028, solidifying the timeline for the capital's relocation. However, a recent ruling by the Constitutional Court that halved land rights for investors may complicate the project further, casting shadows over investment prospects, according to Reuters, South China Morning Post, and The Jakarta Post.