Prabowo-Gibran Government Must Be Ready To Pay Debt Falling Tempo IDR 3,748 Trillion

Prabowo and Gibran (Photo: Antara)

JAKARTA - The government of the President and Vice President Elect Prabowo Subianto-Gibran Rakabuming Raka must be prepared to pay debts due during his leadership.

Meanwhile, based on data from the Ministry of Finance (Kemenkeu), debt maturity as of April 30, 2024 for the period 2025 to 2029 reached IDR 3,748 trillion. As for the details in 2025 of IDR 800.33 trillion, in 2026 it was IDR 803.19 trillion, while in 2027 it was IDR 802.61, in 2028 it was IDR 719.81 trillion and in 2029 it was IDR 622.3 trillion.

Meanwhile, 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.

Finance Minister Sri Mulyani Indrawati assessed that debt matured which reached Rp800.33 trillion in 2025 was not a problem as long as the condition of the State Budget, Indonesia's economy and politics remained stable.

"The maturity of the government debt, this is what is often analyzed, if there is a point that the risks faced by a country are not at a magnitude, but in the country's ability to revolving at a cost that is considered fair," he said in a working meeting with Commission XI DPR RI, Thursday, June 6.

According to Sri Mulyani, when the country remains credible, the state budget is good, the economic condition is good, the political condition is stable so that the interest rate that rolls or revolving is almost certain, the risk is small because the market thinks the country is still safe.

"So that the due date seen here in 2025, 2026, 2027 which looks high is not a problem as long as the perception of the state budget for economic fiscal policy and of course politics remains the same," he explained.

According to Sri Mulyani, holders of state debt securities who are due will not immediately take it because it is still considered an investment. It is different if this stability condition is disrupted, debt securities holders can release it and run away from Indonesia. Therefore credibility, and sustainable, is important.

Sri Mulyani conveyed that the high debt payment due to the Covid-19 pandemic was due to the COVID-19 pandemic. At that time, Indonesia needed nearly Rp1,000 trillion in funds for additional expenditures because state revenues fell 19 percent because economic activity stopped.

"So if 2020 is the maximum due of our pandemic in 7 years and now in concentration, in the last 3 years 2025, 2026 and 2027, some in 8 years. This then raises perceptions of how many have piled up," he said.

Sri Mulyani explained this because of the cost of the pandemic and is part of the burden sharing scheme. "That's the cost of a pandemic based on the agreement between us and BI to carry out burden sharing so that BI countries are good, fiscal credible and political acceptable, we agree on the instrument," he said.