TEMPO.CO, Jakarta - Government debt stood at Rp8.25 quadrillion as of Jan. 31, 2024, an increase of 38.75 percent of gross domestic income or GDP and the highest since the era of President Joko Widodo's administration. But Yustinus Prastowo, spokesman for Finance Minister Sri Mulyani Indrawati, said the debt was still in a safe position.

He said that from the perspective of financial risk indicators, the current debt position was still in a controlled condition. Judging from the ratio, Prastowo said, it is still far below the limit of the State Finance Law, namely 60 percent of GDP. "Interest rate risk, exchange rate risk, and maturity profile are also under control," he said on Tuesday, March 5.

Yustinus said the increased debt level will not make economic growth sluggish. To see this relationship, it is necessary to examine the factors that affect economic growth, such as household consumption, government spending, investment, exports and imports, etc.

He explained that the need for financing through debt is regulated in the fiscal framework or APBN and stipulated by law. Currently, the need for debt financing takes into account the deficit in the 2024 State Revenue and Expenditure Budget or APBN of 2.29 percent of GDP.

"This deficit has actually decreased from the deficit in the 2023 state budget, which was 2.84 percent. Meanwhile, the deficit according to Presidential Decree 75/2023 is 2.27 percent," Prastowo told Tempo.

Prastowo said that the performance of the state budget as of January 2024 was quite good, with a recorded surplus of Rp31.3 trillion or 0.14 percent of GDP.

Sharing Prastowo's sentiments, Bank Indonesia Deputy Governor Erwin Haryono said that the current value of government debt was still considered quite safe. "I haven't seen this figure affect market sentiment," he told Tempo on Monday, March 4.

In fact, Erwin said, Indonesia has a good debt ratio compared to the group of governments. According to him, debt figures should not only be looked at in terms of nominal value but also in terms of other ratios.

"Again, we are not only looking at numbers and figures, but also ratios that are compared to economic capacity, which is related to the ability to pay debt," he said.

Aisyah Amira Wakang

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