Sri Mulyani Reveals Indonesia's Debt Ratio Is Still Safe Against GDP

Illustration (Photo: Doc. ANTARA)

Minister of Finance Sri Mulyani Indrawati revealed that Indonesia's current debt condition is still in a safe condition.

This is reflected in the ratio of Indonesia's debt 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 ratio 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.

Based on data from the Ministry of Finance (Kemenkeu), the position of government debt until April 2024 is 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 compared to the debt position at the end of March 2024 which amounted to IDR 8,262.1 trillion.

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

This value is still below the safe limit of 60 percent of GDP in accordance with Law Number 17/2003 concerning State Finance. In fact, it is still better than being established through the Middle-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.

If detailed, the amount of government debt in the form of SBN reaches IDR 7,333 trillion.

This value comes from domestic SBN amounting to 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 amounted to Rp1,005 trillion.