Airlangga on Indonesia's Debt Hike: We Are Not Alone

TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto responded to the rising state debt-to-GDP ratio. He said the surge was also experienced by many countries during the ongoing COVID-19 pandemic.

“The debt ratio has indeed increased, but we are not alone. Almost all countries experience a hike in debt ratio,” said Airlangga in a webinar, Wednesday, September 29.

He said the COVID-19 situation is unpredictable and required extraordinary measures. “Not a single country out of 215 countries could predict that the pandemic has lasted for nearly two years,” he added.

Airlangga thanked Finance Minister Sri Mulyani Indrawati and Bank Indonesia Governor Perry Warjiyo for working together to share the burden during this pandemic, including in the procurement of COVID-19 vaccines for the people.

According to Minister Airlangga, Indonesia was helped by the increase in commodity prices, such as palm oil and its derivatives, as well as rubber, copper, gold, nickel, steel, and coal.

He also mentioned that several economic indicators showed good resilience in the first semester of 2021. For example, a low current account deficit at 0.77 percent, foreign exchange reserves that soared to US$144.8 billion, a positive trade balance at US$4.74 billion, up to sloping bond yields and controlled inflation at 1.7 percent.

As of August 2021, the Finance Ministry reported that the government debt stood at Rp6,625.43 trillion with the debt-to-GDP ratio at 40.85 percent, increased from the previous month’s figure at Rp6,570.17 trillion.

Read: Minister Erick Thohir Answers Questions About Debt in SOEs

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