Ministry Of Finance: During Good Financial Market, Debt Falls IDR 800 Trillion In 2025 No Problem

JAKARTA - Director of Government Securities (SUN) of the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance Deni Ridwan said that due debt of IDR 800 trillion in 2025, as long as the financial market is good, debt due next year is not a problem.

"Mrs. (Menkeu) said yesterday that as long as our financial markets were good, during a statement from the public, from good investors it was something we could manage," he said after a press conference with the media crew in Jakarta, Monday, June 10.

However, Deni said that the government's average debt is due per year in the range of Rp. 600 trillion to Rp. 700 trillion. Meanwhile, debt is due which will reach Rp. 800 trillion next year due to debt withdrawals issued in the context of handling the Covid-19 pandemic.

"Usually it's around Rp. 600 trillion to Rp. 700 trillion. Only next year it will mature because there is an SBN issued in the context of handling the Covid pandemic, so some are around Rp. 100 trillion owned by BI," he added.

Deni said that in the future the government will continue to coordinate as needed in order to maintain fiscal sustainability.

"So this is something that can be discussed, there is already a team from the government with BI for us to discuss how we will handle SBN which is due next year, which is actually published in order to handle the pandemic so that later we can get the best solution, on the one hand also in order to maintain our fiscal sustainability," he said.

Previously, Minister of Finance Sri Mulyani Indrawati revealed that Indonesia's current debt condition is still in a safe condition as reflected in Indonesia's debt ratio to Gross Domestic Product (GDP) which is still within safe limits when compared to other countries.

"Although it is often conveyed, there are still many people who are worried about Indonesia's debt because they see its magnitude," Sri Mulyani said at the Commission XI Working Meeting of the DPR RI, Thursday, June 6.

Sri Mulyani explained that Indonesia's debt to GDP in 2022 was 39.7 percent. This figure is still lower than other countries such as Malaysia by 60.4 percent, Thailand by 61 percent, India by 88.5 percent, and Argentina by 85 percent.

In addition, Sri Mulyani said that in the last 10 years, from 2012 to 2022, almost all countries experienced a surge in debt ratios.

"We see that almost the G20 has all increased in terms of the debt GDP ratio, events like the Russian state in that regard. Saudi Arabia is also increasing from its debt because they want to build," he said.

However, Sri Mulyani said that although in 2020 there was an increase in the deficit, the government managed to control it in a close time.

"If we look at the ratio of Indonesia's debt to our GDP ratio, although in the shock situation in 2020, the deficit has soared from 6.1, but we can consolidate fiscals in a very short time, so that in terms of our debt ratio, it will increase and then decrease," he said.

Therefore, Sri Mulyani said that she would ensure that the government would continue to be committed to managing debt properly.

"This is very important and the office is a commitment from good APBN management," he explained.

Meanwhile, based on data from the Ministry of Finance (Kemenkeu), the position of government debt until April 2024 was IDR 8,338.43 trillion. Meanwhile, in nominal terms, the government's debt position increased by IDR 76.33 trillion, an increase of around 0.92 percent when compared to the debt position at the end of March 2024 which amounted to IDR 8,262.1 trillion.

Meanwhile, the ratio of government debt is equivalent to 36.5 percent of Indonesia's gross Domestic Product (GDP).

Meanwhile, this value is still below the safe limit of 60 percent of GDP according to Law Number 17/2003 concerning State Finance. In fact, it is still better than being established through the Medium-Term Debt Management Strategy for 2024-2027 at the level of 40 percent.

Meanwhile, based on instruments, government debt consists of two types, namely state securities (SBN) and loans. The majority of government debt in April 2024 is still dominated by SBN instruments, namely 32.1 percent and the remaining 4.4 percent of loans.

Furthermore, if it is detailed, the amount of government debt in the form of SBN reaches Rp7,333 trillion. The value comes from domestic SBN of Rp5,899 trillion, namely from Government Securities of around Rp4,714 trillion and State Sharia Securities (SBSN) reaching Rp1,185 trillion. Meanwhile, the amount of government debt in the form of loans is Rp1,005 trillion.