Government Debt Reaches IDR 8,353 Trillion, Economist Says Jokowi Leaves Bad Impressions At The End Of His Term

Illustration (Photo: Doc Antara)

JAKARTA - Director of the Digital Economy Center of Economic and Law Studies (Celios) Nailul Huda assessed that the government's debt ratio as of the end of May 2024 was IDR 8,353.02 trillion, up to 38.71 percent of gross domestic product (GDP) leaving a bad impression ahead of the end of President Joko Widodo's (Jokowi) administration.

"Jokowi has left a bad legacy in debt management even though the percentage of GDP is still safe according to law (under 60 percent)," he told VOI, Wednesday, July 3.

Meanwhile, the government's debt position increased again in May 2024 to reach IDR 8,353.02 trillion.

This figure increased by IDR 14.59 trillion, an increase of around 0.17 percent compared to April 2024 which amounted to IDR 8,338.43 trillion.

Meanwhile, based on the instrument, the composition of government debt is dominated by the State Securities (SBN) instrument whose contribution is 87.96 percent.

Until the end of May 2024, the issuance of SBN was recorded at IDR 7,347.50 trillion.

This issuance is divided into domestic SBN, which is 70.69 percent and foreign exchange (Valas) SBN is 17.27 percent.

In the report, the Domestic SBN amounted to Rp5,904.64 trillion which was divided into Government Securities (SUN) amounting to Rp4,705.24 trillion and State Sharia Securities (SBSN) worth Rp1,199.40 trillion.

Meanwhile, SBN Valas amounted to Rp1,442.85 trillion, with details, SUN amounted to Rp1,086.55 trillion and SBSN worth Rp356.30 trillion.

In addition, the government debt contributed 12.04 percent of the government loan debt until the end of May 2024 which amounted to Rp1,005.52 trillion with details of domestic loans of Rp36.42 trillion and foreign loans of Rp969.10 trillion.

As for foreign loans, the details are bilateral loans of Rp265.83 trillion, multilateral loans of Rp584.65 trillion, and commercial bank loans of Rp118.62 trillion.

According to Huda, government debt increases significantly every year, plus when handling the COVID-19 pandemic which requires a fairly large budget.

"However, the nominal figure continues to increase drastically. In 2020-2022 our debt will increase sharply to finance the handling of COVID-19," he said.

Meanwhile, based on data from the Ministry of Finance (Kemenkeu), debt dues as of April 30, 2024, for the period 2025 to 2029 reached IDR 3,748 trillion.

As for the details in 2025 amounting to IDR 800.33 trillion, in 2026 it will be IDR 803.19 trillion, while in 2027 it will be IDR 802.61, in 2028 it will be IDR 719.81 trillion and in 2029 it will be IDR 622.3 trillion.

According to him, the government's debt matures in 2025 so that next year the fiscal deficit is predicted to increase sharply.

"Unfortunately, the primary balance (receivers of non-debt government expenditures) is also targeted to be negative. This means that to pay off our debts we must also owe," he said.

Huda said, even though in the last few years it has been positive, it is very unfortunate that the government is targeting a negative primary balance.

"As a result of the payment of debt will accumulate, the Prabowo government will find it increasingly difficult to control debt in the future," he said.