Interest Payments on Government Debt Increased to Rp 405.9 Trillion in 2022

The Indonesian government allocated Rp 405.9 trillion (approximately US$27.7 billion based on 2022 average exchange rate) for interest payments on its debt in the 2022 State Budget (RAPBN). This allocation represents a 10.8% increase from the 2021 outlook of Rp 366.2 trillion (approximately US$25 billion based on 2021 average exchange rate). The total comprises Rp 393.7 trillion (approximately US$26.8 billion) for domestic debt interest payments and Rp 12.2 trillion (approximately US$0.8 billion) for foreign debt.

The calculation of the 2022 debt interest payment is based on three factors. First, the outstanding debt from previous years, including additional debt incurred for handling Covid-19 and national economic recovery. Second, the planned increase in debt for 2022. Third, the planned debt portfolio management program (liabilities management).

The Ministry of Finance's report also details the assumptions used in calculating the debt payment. These assumptions include the rupiah exchange rate against foreign currencies, the 10-year State Treasury Bond (SUN) interest rate, which serves as a benchmark for State Securities (SBN) interest rates, and reference interest rates for loans and their spreads. Furthermore, debt payments are based on assumptions regarding SBN issuance discounts and estimates of new debt procurement costs.

Debt interest payments in the 2022 RAPBN aim to fulfill the government's obligation to maintain accountability in debt management. In addition, debt interest payments aim to improve debt interest efficiency at a manageable risk level through optimal debt composition and portfolio management.