Alhamdulillah! After Lebaran, Indonesia's Debt Drops By IDR 29 Trillion

Illustration (Photo: Doc. Antara)

The Ministry of Finance (Kemenkeu) reported that the position of government debt at the end of April 2023 was IDR 7,849.8 trillion. This amount is lower by around IDR 29.1 trillion if from the March period which was the beginning of Ramadan of IDR 7,879 trillion.

"The debt ratio (per April) for gross domestic product (GDP) is 38.15 percent," wrote the minutes of the Ministry of Finance today, Friday, May 26.

It was explained that both nominally and in the ratio, the debt position decreased compared to the previous month.

"This is influenced by the mutation of financing both from loan instruments and SBN, where the payment of principal debt installments in April is greater than the procurement/issue of new debt, as well as the appreciation of the rupiah for major currency currency value (EUR, JPY, USD) in April 2023 compared to March 2023," explained the Ministry of Finance.

In addition, the ratio of government debt to GDP as of the end of April 2023 is at a safe limit (well below 60 percent of GDP), according to Law Number 17 of 2003 concerning State Finance.

"The government always manages debt carefully with controlled risks through optimal composition, both related to currencies, interest rates, and dues," he said.

Furthermore, the composition of debt is dominated from domestic, which is 72.88 percent. Meanwhile, based on the instrument, the composition of the majority debt is in the form of SBN which reaches 89.26 percent.

Meanwhile, as of the end of April 2023, Indonesia's debt maturity profile is claimed to be quite safe with a weighted average maturity (ATM) in the range of 8 years.

Furthermore, in order to increase debt management efficiency in the long term, the government continues to strive to support the establishment of deep, active, liquid domestic SBN markets.

One of the strategies is through the development of various SBN instruments, including the development of environmental-based thematic SBN (Green Sukuk) and SDG (SDG Bond).

In addition, the role of digital transformation in the SBN issuance and marketing process, especially Retail SBN supported by online systems is no less important, able to make debt procurement through SBN more effective and efficient, and credible.