Government Debt Continues to Climb and Moves Away from Pre-Pandemic Debt Levels

November 29, 2023, 10.38 PM | Source: Harian KONTAN
Government Debt Continues to Climb and Moves Away from Pre-Pandemic Debt Levels

ILUSTRASI. The government debt in October this year reached IDR 7,950.52 trillion, growing from September 2023, which was IDR 7,891.61 trillion.

FOREIGN DEBT - JAKARTA. The government continues to accumulate debt. The government's debt position in October of this year reached IDR 7,950.52 trillion, or grew from the September 2023 position of IDR 7,891.61 trillion.

Citing the OUR STATE BUDGET Book November 2023 Edition, the current government debt ratio to gross domestic product (GDP) is 37.68%.

This debt ratio has decreased compared to the end of 2022 and is below the safe limit of 60% of GDP according to Law No. 17/2003 on State Finance. "This ratio is also still better than what has been set in the range of 40% in the Medium-Term Debt Management Strategy 2023-2026," the book report quoted, Tuesday (28/11).

The debt position in September was dominated by government securities (SBN) worth IDR 7,048.9 trillion. This SBN consists of domestic SBN reaching IDR 5,677.55 trillion and foreign currency SBN (forex) reaching IDR 1,371.35 trillion.

Then, the government's loan position has reached IDR 901.62 trillion, consisting of foreign loans worth IDR 872.09 trillion and domestic loans IDR 29.52 trillion.

The government's debt position is predicted to be difficult to return to the pre-Covid-19 pandemic era, which is IDR 4,779.28 trillion. The Deputy Director of the Institute for Development of Economics and Finance (Indef) Eko Listiyanto even predicts that the government's debt position will skyrocket at the end of 2023.

"When will the government's debt position return to pre-pandemic levels? It seems difficult, because the number is almost IDR 8,000 trillion," he said to KONTAN, Tuesday (28/11).
Eko argued, this debt position will continue to increase because as time goes by, the debt will continue to accumulate.

Most importantly, according to him, the government must maintain the debt ratio and even have to return the debt ratio to GDP to below 30%.

The same thing was stated by the Economist of the Center of Reform on Economics (CORE) Yusuf Rendy Manilet, who predicts that the government's debt ratio will only return before the pandemic in 2027.

"By following the current trend of debt ratio reduction, the fastest time needed for the debt ratio to return to the pre-pandemic era is about three to four years," said Yusuf.

He predicts that government debt by the end of 2023 will not exceed IDR 7,900 trillion or the debt position in October 2023.

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Editor: Syamsul Azhar
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