Sri Mulyani's Subordinates: Indonesia Has The Ability To Pay Debt, Better Than Malaysia, Singapore And Thailand

Minister of Finance, Sri Mulyani Indrawati. (Photo: Doc. Ministry of Finance)

JAKARTA - Special Staff to the Minister of Finance Yustinus Prastowo said that Indonesia has the ability to pay off debt because the ratio of tax revenue to debt is better than other countries.

We are relatively better off and the ratio of state revenue or tax revenue to our debt is quite good compared to many countries, "said Sri Mulyani's men, quoted from Antara, Tuesday, February 23.

He noted that during the last 10 years (2010-2019), the central government's debt ratio was maintained at 30 percent of gross domestic product (GDP).

Unless, he continued, in 2020 the percentage would increase to 38.7 percent due to the impact of the COVID-19 pandemic, with total central government debt reaching IDR 6,074.56 trillion, consisting of the issuance of Government Securities (SBN) IDR 5,221.65 trillion and loans. IDR 852.91 trillion.

In his presentation, the ratio of tax revenue to Indonesia's debt in 2018 reached 38.32 percent, still better than neighboring countries such as Malaysia which reached 21.83 percent, Singapore 11.93 percent.

In fact, Thailand reached 35.73 percent, the Philippines reached 36.98 percent and Brazil reached 14.05 percent.

"We are under Turkey, South Africa but we are much better than Singapore, Malaysia, Thailand and the Philippines, meaning we have a greater ability to pay off debts," he said.

The government, he said, would maintain the debt service ratio (DSR) in order to have the ability to pay, especially foreign debts.

The DSR in 2020 reached 23.8 percent or an increase compared to 2019 reaching 18.4 percent due to an increase in the number of maturing loans, thus increasing the portion of principal installments.

The development of principal installments and interest on government debt had more debt repayments than the relatively small interest expense payments.

In his presentation, it was stated that the payment of principal debt in 2020 reached IDR 444.14 trillion and spending on debt interest reached IDR 314.08 trillion.

"The development of principal installments and interest on government debt is relatively stable, well maintained," he said.