Sri Mulyani Openly Talks About Indonesia's Debt Next Year: Projected To Increase

Illustration. (Photo: Doc. Antara)

JAKARTA - The government through the Minister of Finance (Menkeu) Sri Mulyani estimates that the debt to gross domestic product (GDP) ratio will increase in 2022 in line with the fulfillment of state spending to cope with the impact of the COVID-19 pandemic.

This was revealed by the Minister of Finance during a working meeting with Commission XI of the DPR RI at the Senayan Parliament Complex, Jakarta. According to the Minister of Finance, the government projects the debt ratio will be at the level of 43.76 percent to 44.28 percent of GDP.

"We understand that the current state of COVID-19 is placing an increasing burden on our state budget," he said.

The Minister of Finance added that the debt ratio under normal conditions is maintained at the level of 30 percent of GDP.

"For this year, the government predicts the debt ratio will be at the level of 41 percent," he said.

For information, the range of government debt is still in a safe condition if it does not exceed the 60 percent limit of GDP. The mandate is contained in Law No. 17 of 2003 which regulates the maximum limit of the debt ratio at 60 percent.

Most recently, Bank Indonesia (BI) in its report stated that Indonesia's foreign debt (ULN) in the first quarter of 2021 was US$415.6 billion. This amount is lower than the fourth quarter of 2020 which was recorded at US$417.5 billion, down 0.4 percent.

In detail, the position of the Government's external debt in the first quarter of 2021 reached 203.4 billion US dollars. Meanwhile, private external debt until the closing of March 2021 is 209.4 billion US dollars, which is bigger than the government's external debt.

"Indonesia's external debt remains healthy as reflected in the ratio of foreign debt to Gross Domestic Product (GDP) which is maintained at around 39.1 percent. This amount decreased compared to the ratio in the previous quarter which was 39.4 percent,” said Head of the BI Communications Department Erwin Haryono, last Friday, May 21.