Government Debt Increases Rp73 Trillion In A Month, As Of August To Rp7,236 Trillion

JAKARTA - The Ministry of Finance (Kemenkeu) reports that until the end of August 2022, the government's debt position is at IDR 7,236.6 trillion, equivalent to 38.2 percent of gross domestic product (GDP).

This amount is higher than IDR 73.4 trillion from the position in July 2022, which at that time was recorded at IDR 7,163.1 trillion or 37.9 percent of GDP.

The government claims that despite the nominal increase and ratio, the debt position is still within safe, reasonable and controlled limits accompanied by optimal portfolio diversification.

This increase occurred mainly due to the increase in spending needs during the three years of the relaxation period due to COVID-19. However, fiscal discipline is still being carried out and the composition of debt is still maintained below the maximum limit of 60 percent for GDP, thus the situation will continue to improve along with Indonesia's economic improvements," said the Ministry of Finance in its minutes quoted Monday, October 3.

In detail, last month's debt position was dominated by the State Securities (SBN) instrument which reached 88.79 percent. Meanwhile, based on currency, government debt is dominated by domestic currency (rupiah), which is 71.06 percent.

Currently, SBN ownership is dominated by banks and followed by Bank Indonesia (BI). Meanwhile, foreign investor ownership has continued to decline since 2019 which reached 38.57 percent, until the end of 2021 it was recorded at 19.05 percent, and as of September 22, 2022 it reached 14.70 percent.

This shows that the government's consistent efforts in order to achieve financial independence and are supported by sufficient domestic liquidity. However, the impact of the normalization of monetary policy on the SBN market still needs to be watched out for," said the Ministry of Finance.

It is explained that prudent debt management, supported by a significant increase in state revenues and a better quality of spending, is a form of the government's commitment and responsibility in improving the state budget.

"The challenges ahead will be even more severe because the food and energy crisis is another stumbling block that needs to be watched out for after the pandemic has passed so that fiscal discipline, especially debt management, will continue to be maintained so that the economy continues to run," the report concluded.