I'm Well! Government Debt Ratio 38.88 Percent Of GDP, Down Rp50 Trillion In A Month: Average Maturity Of 8.7 Years

JAKARTA - The Ministry of Finance (Kemenkeu) reports that as of the end of May 2022, the government's debt position is at IDR 7,002.24 trillion with a debt to GDP ratio of 38.88 percent.

This amount is known to be around IDR 50 trillion lower compared to the previous month's record of IDR 7,052 trillion or equivalent to 40.39 percent of GDP.

"Nominally, there has been a decrease in the total outstanding and debt-to-GDP ratio compared to the realization in April 2022," said the latest State Budget minutes as quoted by the editorial staff on Sunday, June 26.

In detail, Sri Mulyani's staff explained that the debt-to-GDP ratio was within safe, reasonable, and controlled limits accompanied by optimal portfolio diversification.

Based on the type, government debt is dominated by SBN instruments which reached 88.20 percent of the total debt composition at the end of May 2022.

Meanwhile, based on currency, government debt is dominated by the domestic currency (rupiah), which is 70.68 percent.

In addition, ownership of tradable SBN by foreign investors has continued to decline since 2019, which reached 38.57 percent, until the end of 2021 which reached 19.05 percent, and as of June 7, 2022, it reached 16.74 percent.

"The debt portfolio is maintained so that it continues to be optimal, so that the increase in debt has been carefully calculated in order to obtain the most efficient risks and costs," said the Ministry of Finance.

In terms of maturity, the composition of government debt is said to have been managed taking into account the ability to pay and fiscal capacity. This can be seen from the average time to maturity throughout 2022 which is still maintained at around 8.7 years.

"Procurement of government debt is determined with the approval of the DPR in the APBN Law and its implementation is supervised by the BPK. In its implementation, the procurement of government debt also takes into account the development of economic conditions and financing needs," said the Ministry of Finance.

For information, the previous government debt level was always at the psychological level of IDR 6,000 trillion. Meanwhile, for next year the value of debt is believed to be higher than current conditions.

This is indicated by the report of the Minister of Finance Sri Mulyani in the DPR Plenary Session regarding the discussion of the 2023 RAPBN.

"The debt ratio remains under control within manageable limits," said the Minister of Finance at the Parliament Complex on Friday, May 20.