Langgam Pos - As of June 2024, the Indonesian Ministry of Finance reports that the government's debt has soared to IDR 8,444.87 trillion, marking an increase of IDR 91.85 trillion from the previous month's debt of IDR 8,353.02 trillion.
According to the 2024 APBN KiTa document, this rising debt level has pushed the government's debt-to-GDP ratio up from 38.71% to 39.13% as of June 2024.
Despite the increase, the debt remains well below the safe threshold established by Law No. 17 of 2003 on State Finances, which sets a limit of 60% of GDP.
The Ministry of Finance notes, "As of the end of June 2024, the government's debt stands at IDR 8,444.87 trillion, with a debt-to-GDP ratio of 39.13%. This ratio remains consistently below the safe limit of 60% of GDP as stipulated in Law No. 17 of 2003."
The report details that the government’s debt consists of two main types: government bonds (SBN) and loans. As of June 2024, the majority of the debt is in the form of SBN, accounting for 87.85%, with the remaining 12.15% in loans.
Specifically, the government's SBN debt totals IDR 7,418.76 trillion, comprising domestic SBN of IDR 5,967.70 trillion, including government bonds (SUN) of IDR 4,732.71 trillion and Islamic government bonds (SBSN) of IDR 1,234.99 trillion.
Foreign currency-denominated SBN debt stands at IDR 1,451.07 trillion, with SUN at IDR 1,091.63 trillion and SBSN at IDR 359.44 trillion.
Regarding foreign loans, the government’s debt reaches IDR 1,026.11 trillion as of June 2024. This includes domestic loans of IDR 38.10 trillion and foreign loans of IDR 988.01 trillion, which break down into bilateral loans of IDR 263.72 trillion, multilateral loans of IDR 600.47 trillion, and commercial bank loans of IDR 123.83 trillion.
On another note, the Ministry of Finance highlights that Indonesia’s debt maturity profile remains relatively safe, with an average time to maturity of 7.98 years.
The Ministry adds, "The government's disciplined debt management supports credit rating agencies' assessments (S&P, Fitch, Moody's, R&I, and JCR), which continue to maintain Indonesia's sovereign credit rating at investment grade amid global economic dynamics and financial market volatility."
5 Major Challenges for the 2025 State Budget Under Prabowo
Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (CELIOS), identifies five significant challenges for the new administration regarding the 2025 State Budget (APBN) under Prabowo-Gibran.
The first challenge is the budget deficit caused by ongoing projects from President Jokowi's era that need completion. "The widening APBN deficit due to Jokowi-era projects, capital injections to SOEs, and increasing operational expenditures, such as staff and goods costs, must be addressed," Bhima told Liputan6.com.
The second challenge concerns tax ratios. Bhima points out risks related to a possible decrease in tax ratios due to pressures on commodity sectors, suboptimal compliance from large taxpayers, and the digital sector.
Another challenge is the upcoming debt maturity next year amounting to IDR 800 trillion, which could limit the new administration's budget flexibility for new programs like free school meals.
Economic growth faces risks due to slowing demand from key trading partners, such as China, and selective investment conditions due to high interest rates and geopolitical risks.
Bhima concludes, "The new finance minister under Prabowo should be more rational and possibly reject overly expensive budget programs."
In a separate statement, Ibrahim Assuaibi, Director of PT. Laba Forexindo Berjangka, mentions that achieving the target of 8% economic growth over the next five years under President-elect Prabowo Subianto will be challenging if structural economic issues remain unresolved. He notes that during President Jokowi's two terms, economic growth stagnated around 5%, and Jokowi’s campaign target of 7% growth was never met.
(*)
Source: 1
