You Should Know! Government Debt Increases To IDR 7.123.6 Trillion In Semester I 2022

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA – The Ministry of Finance (Kemenkeu) revealed that the position of government debt at the end of June was at IDR 7.123.62 trillion. This amount is equivalent to 39.56 percent of gross domestic product (GDP).

According to VOI records, this value is higher than the May 2022 book which amounted to IDR 7.002.24 trillion or 38.88 percent of GDP.

"The debt-to-GDP ratio is within safe, reasonable, and controlled limits accompanied by optimal portfolio diversification," said the Ministry of Finance's minutes in the July 2022 edition of the State Budget.

Furthermore, the increase in debt has mostly occurred since 2020 due to the COVID-19 storm. However, the State Budget (APBN) which is still in deficit has not been able to meet the need for community protection so that the National Economic Recovery (PEN) Program is carried out through debt.

In detail, government debt is dominated by Government Securities (SBN) instruments which reached 88.46 percent of the total debt composition at the end of the first semester of 2022.

Meanwhile, based on currency, government debt is dominated by the domestic currency (rupiah), which is 70.29 percent.

In addition, currently ownership by foreign investors has continued to decline since 2019 which reached 38.57 percent, until the end of 2021 it was recorded at 19.05 percent, and as of 5 July 2022 it reached 15.89 percent.

"Procurement of government debt is determined with the approval of the DPR in the APBN Law and its implementation is monitored by the BPK," said the report from the Ministry of Finance.

Then, based on several indicators of debt risk, it is claimed that it is still at a safe level with controlled risk. It was revealed that prudent debt management, supported by a significant increase in state revenues and better quality of spending, is a form of government commitment and responsibility in improving the state budget.

"The hard work of the state budget and Indonesia's quite resilient economic development have been recognized by various credit rating agencies which have affirmed Indonesia's credit rating level, while at the same time many other countries have downgraded their ratings," the ministry wrote in a statement.