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Gov't debt tops Rp 8,000 trillion but remains manageable: Official

Jakarta Globe - January 3, 2024

Winda Destiana Putri, Jakarta – The government's outstanding debt has reached Rp 8,041 trillion ($518.8 billion) as of November 2023, yet a Finance Ministry official said on Tuesday that the current debt level remains within a safe threshold.

The latest figure represents an increase of Rp 5,432.21 trillion since President Joko "Jokowi" Widodo took office in 2014.

However, solely assessing the debt's numerical value might not provide a comprehensive picture, said Suminto, director-general of the Finance Ministry's refinancing risks management.

"It's crucial not to evaluate our debt solely based on its amount, as numerous indicators demonstrate a much more manageable debt level compared to previous years," Suminto said during a news conference in Jakarta.

He pointed out a reduction in the debt-to-GDP ratio, which declined to 38.11 percent in November from 39.7 percent in December 2022 and 40.7 percent in December 2021.

Furthermore, the share of foreign currency debt to the overall government's debt has decreased to 27.5 percent, significantly lower than the pre-pandemic level of 37.9 percent reported in December 2019.

"This signifies significantly diminished currency risks," Suminto added.

The average repayment period for government debt stands at 8.1 years, with 82 percent of the overall debt carrying fixed interests, shielding it from the volatility of fluctuating interest rates in financial markets.

"Simultaneously, the economy continues to grow, GDP shows consistent expansion, and state revenue demonstrates a steady rise. Despite the escalating debt amount, we've implemented improved risk management strategies and achieved better indicators," Suminto said.

Source: https://jakartaglobe.id/business/govt-debt-tops-rp-8000-trillion-but-remains-manageable-officia