JAKARTA - The Director of the Digital Economy Center of Economic and Law Studies (Celios) Nailul Huda said that the increase in the debt-to-Gross Domestic Product (GDP) ratio would increase pressure on the State Budget (APBN), especially in terms of the ability to pay debts.
He added that currently, the portion of interest payments on debt in the state budget has reached around 15 percent with the increase in debt, the burden of interest payments will also increase, especially when entering the maturity period which makes the burden on the state budget heavier.
"For the primary balance, Indonesia is already negative. This means that in order to pay interest on debt, you must first owe it. Of course the state budget will not be healthy in the medium and long term," he told VOI, Friday, April 10.
To overcome this, Huda emphasized the importance of improving the budget deficit, and efforts that can be carried out, among others, by increasing state revenues and/or making government spending more efficient.
However, according to him, state revenue is still not optimal in the midst of an economic condition that has not fully recovered.
"State revenue seems to be not too optimal. There are still many loopholes here and there and the economy is not good," he said.
In addition, Huda said, government spending actually increased in line with the implementation of various priority programs that absorbed large budgets.
"This must be improved so as not to widen the budget deficit and brake debt," he concluded.
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