Listen! Government Debt Policy Direction In The 2024 State Budget

Illustration (Photo: Doc. Ministry of Finance)

Minister of Finance (Menkeu) Sri Mulyani spoke on behalf of the government to respond to the views of the DPR factions on the framework of the Macroeconomics and the Principles of Fiscal Policy (KEM PPKF) 2024.

On that occasion, the state treasurer alluded to the direction of government debt policy in the draft APBN discussion.

Sri Mulyani explained that the deficit and budget financing will be managed in a healthy, prudent, and sustainable manner.

"In implementing an expansionary, focused and measurable 2024 fiscal policy, the government will control the deficit in the range of 2.16 percent to 2.64 percent of gross domestic product (GDP)," he said at the Plenary Meeting at the Senayan Parliament Complex, Jakarta on Tuesday, May 30.

According to the Minister of Finance, debt financing is still managed prudently, and is sustainable according to best practice debt management.

"The government will maintain a balance between costs and risks, keeping debt ratios within safe limits in the range of 38.07 percent to 38.97 percent of GDP," he said.

As for the debt issuance strategy, it is carried out in a measured manner, and conducts market deepening so that the cost of funds is more efficient.

"The government continues to encourage innovative and creative financing by empowering private roles, BUMN, BLU, SMV, and SWF to accelerate the achievement of development targets," he stressed.

Citing the latest realization of the 2023 State Budget, the amount of government debt until April is IDR 7,849.8 trillion.

This figure is lower by IDR 29.1 trillion from the March period which amounted to IDR 7,879 trillion.

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

In detail, 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.

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