Ahead Of The Inauguration, Prabowo Washered By Foreign Debt By Jokowi Achieving IDR 6,468 Trillion

Illustration (Photo: Doc Antara)

JAKARTA - The burden of government debt is increasingly worrying, ahead of the inauguration of President-elect Prabowo Subianto on October 20, 2024.

Indonesia's Foreign Debt (ULN) in July 2024 was recorded at 414.33 billion US dollars or equivalent to Rp. 6,468 trillion (exchange rate of Rp. 15,655).

Meanwhile, foreign exchange reserves are sometimes used to pay government external debt, Bank Indonesia (BI) recorded the position of Indonesia's foreign exchange reserves at the end of September 2024 of 149.9 billion US dollars or lower than the position at the end of August 2024 of 150.2 billion US dollars.

Based on the September 2024 edition of Indonesia's Foreign Debt Statistics (SULNI) book, Indonesia's external debt position in July 2024 was recorded at 414.33 billion US dollars or an annual growth of 4.1 percent.

Meanwhile, the government's external debt position in July 2024 was 194.3 billion US dollars or grew 0.6 percent.

Meanwhile, private external debt was recorded at 195.2 percent, down 0.1 percent.

The government's short-term debt or debt maturing less than a year is US$34 million as of July 2024.

While the remaining 194.23 million US dollars are long-term debt due to more than one year.

Meanwhile, the statistics of the government's external debt position consists of debt securities in the form of Government Securities (SBN) and loans. Where the total debt securities reached 132.86 billion US dollars consisting of international SBN amounting to 82.96 billion US dollars and domestic SBN worth 49.9 billion US dollars.

Furthermore, debt in the form of loans amounting to 61.40 billion US dollars, consisting of bilateral loan debt worth 16.52 billion US dollars, commercial amounting to 7.9 billion US dollars, and multilateral as much as 36.97 billion US dollars.

On the other hand, based on the September 2024 edition of our APBN, the position of government debt until August 2024 was IDR 8,461.93 trillion, a decrease of IDR 40.76 trillion compared to the end of July 2024 which amounted to IDR 8,502.69 trillion.

Meanwhile, based on the instrument, the composition of government debt is dominated by State Securities (SBN) instruments whose contributions are 88.07 percent. Until the end of August 2024, the issuance of SBN was recorded at IDR 7,452.56 trillion, divided into domestic SBN and foreign exchange SBN (foreign currency).

Domestic SBN was recorded at Rp6,063.41 trillion which was divided into Government Securities (SUN) amounting to Rp4,845.68 trillion and State Sharia Securities (SBSN) amounting to Rp1,217.73 trillion.

Meanwhile, the remaining foreign exchange (valas) SBN of Rp1,389.14 trillion was divided into Government Securities worth Rp1,025.14 trillion and State Sharia Securities of Rp364 trillion.

Meanwhile, until the end of August 2024, loans amounted to Rp1,009.37 trillion, divided into domestic loans and foreign loans.

Domestic loans were recorded at Rp39.63 trillion and foreign loans worth Rp969.74 trillion which was divided into bilateral loan debt of Rp264.05 trillion, multilateral Rp578.76 trillion, and commercial banks of Rp126.94 trillion.

As of the end of August 2024, domestic SBN ownership is dominated by domestic investors with a share ownership of 85.5 percent.

While foreigners only have a domestic SBN of around 14.5 percent including ownership by the government and foreign central banks.

Domestic financial institutions hold 41.3 percent ownership of SBN, consisting of 19.2 percent of banking, 18.9 percent of insurance companies and pension funds, and 3.2 percent of mutual funds.

For financial institutions, SBN plays an important role in meeting investment needs and managing liquidity, as well as being one of the risk mitigation instruments.

Domestic SBN ownership by Bank Indonesia is around 25.4 percent, which among other things is used as an instrument for monetary management.