Talking About Sri Lanka's Defaulting Debt, Sri Mulyani: Valuable Lessons For Indonesia To Strengthen Budget Management Mitigation

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani also mentioned the condition of Sri Lanka which is said to have failed to pay its state debt with an estimated value of around 51 billion US dollars or equivalent to IDR 731 trillion (State Budget or APBN exchange rate of IDR 14.350).

According to the Minister of Finance, what is experienced by the countries in South Asia cannot be separated from the influence of geopolitics and global dynamics that are currently happening. In her narrative, developing countries tend to be more susceptible to pressure when facing a general upheaval.

"We see that worldwide pressure on the country will increase, as happened in one of Sri Lanka's countries," he said when meeting with media crews through virtual channels in the Financial System Stability Committee (KSSK) forum, Wednesday, April 13.

The Minister of Finance added that this situation has become a valuable lesson for Indonesia to strengthen aspects of mitigation and prudent budget management.

"We continue to be very prudent about the condition of Indonesia's debt," she said.

For information, Sri Lanka is currently reported to be facing a very unfavorable economic situation with a failure to pay debts of IDR 731 trillion. In fact, a literature mentions that the situation is the worst since Sri Lanka's independence in 1948.

As for Indonesia itself, until February 2022, the government's debt position was at IDR 7,014.58 trillion with a ratio to gross domestic product (GDP) of 40.17 percent. VOI noted that this number increased from the book at the end of January 2022 which amounted to IDR 6.919.15 trillion.

Furthermore, the structure of government debt in February was dominated by Government Securities (SBN) amounting to IDR 6.164.2 trillion or 87.88 percent.

While the remaining IDR 850.38 trillion or 12.12 percent is in the form of loans consisting of domestic loans of IDR 13.27 trillion and foreign loans of IDR 837.11 trillion.

The government itself claims that the status of this obligation is still safe considering that the constitutional mandate provides space for debt withdrawals of up to 60 percent of GDP.