Must Understand! Indonesia's Debt Rises But GDP Grows Higher

Illustration (Photo: Doc. Antara)

JAKARTA - Deputy Minister of Finance (Wamenkeu) Suahasil Nazara admitted that the amount of government debt had increased, especially during COVID-19.

According to him, this condition occurred because the government needed greater fiscal space to be able to overcome the impacts caused by the pandemic.

Suahasil said that the change in government debt in the 2018 to 2022 period was 206.5 billion US dollars.

"But Indonesia has also experienced a bigger increase in gross domestic product (GDP) than the increase in debt," he said during a discussion on the 2024 RAPBN with Commission XI of the DPR, Monday, June 5.

Suahasil explained, for the same period there was a nominal GDP spike to the level of 276.1 billion US dollars.

"We are both with Vietnam, whose GDP increase is higher than the increase in debt," he said.

Sri Mulyani's deputy explained that Vietnam experienced a higher ratio of increase with 102 billion US dollars GDP compared to debt of 18.2 billion US dollars.

Meanwhile, other countries such as India, Malaysia, the Philippines, Thailand, to China and the United States are experiencing a reversal condition with a debt ratio greater than the amount of GDP owned.

"This is certainly better than other countries," he said.

VOI noted, in the APBN report for the April 2023 period, it was stated that the amount of government debt was IDR 7,849.8 trillion. This amount is lower by around IDR 29.1 trillion if from the March period which was the beginning of Ramadan of IDR 7,879 trillion.

"The debt ratio (per April) to GDP is 38.15 percent," wrote the minutes of the Ministry of Finance.

To note, the ratio of government debt is at a safe limit because it is far below 60 percent of GDP in accordance with Law Number 17 of 2003 concerning State Finance.