Work is ongoing for the construction of Dhoho International Airport in Kediri, East Java. - Photo: Antara File
JAKARTA: Government debt rose to Rp 8.33 quadrillion (US$513 billion) in April from Rp 8.26 quadrillion in the preceding month.
Despite the increase, the debt level, amounting to 38.64 percent of the nation’s gross domestic product (GDP), remains well below the legal cap set at 60 percent of GDP.
During a meeting on Thursday (June 6), Finance Minister Sri Mulyani Indrawati said the ratio demonstrated sound state budget management.
"If we look at the ratio of Indonesia's debt to GDP, despite the [disruption caused by the coronavirus pandemic] in 2020, where the deficit jumped to 6.1 percent, we were able to consolidate the fiscal [situation] in a very short time,” she said, as quoted by Kumparan.
“[Therefore], the ups and downs in our debt ratio are closely monitored and reflect our commitment to good state budget management.”
According to the May 2024 edition of the Buku APBN Kita (Our State Budget Book) published by the ministry, 71.18 percent of Indonesia's government debt is sourced domestically.
The government aims to use foreign debt onSri Mulyani explained that the primary instrument for state debt funding was Government Securities (SBN), which account for 87.94 percent of the total debt.
She said debt financing via the issuance of SBN bonds helped the development of the domestic financial market.
The remaining 12.06 percent of the Rp 8.33 quadrillion debt is in the form of loans.
The government faces Rp 800 trillion in maturing debt in 2025. This entails Rp 705.5 trillion in SBN and Rp 94.83 trillion in loans.
The minister expressed confidence in managing the maturing debt, provided that budget economic conditions and political stability remained favorable.
Indonesia’s level of government debt, which is the result of accrued annual budget deficits and payments for servicing outstanding debt, compares favorably to that of peer countries.
The Philippines, Thailand and Malaysia have ratios near or above 60 percent of GDP, though Vietnam’s level is similar to Indonesia’s.
Last year, Indonesia’s state budget deficit came in lower than initially planned at just 1.65 percent of GDP, which was significantly lower than the corresponding figures in all of those other four countries. - The Jakarta Post/ANN
