2024, Central Government Debt Projected to Rise to 44.4% of GDP

The Covid-19 pandemic negatively impacted global economic performance. As a result, the majority of countries worldwide, including Indonesia, were forced to increase their debt as an economic recovery measure. The World Bank even projects Indonesia's government debt to reach 44.4% in 2024.

The unprecedented fiscal response to the pandemic's economic recovery required high-level financing of the State Budget (Anggaran Pendapatan dan Belanja Negara/APBN) from the central bank and commercial banks. This was necessary because ownership of government securities by non-resident investors decreased.

This led to a rise in central government debt from 30.2% in 2019 to 41.8% of the Gross Domestic Product (GDP) in 2021.

The World Bank predicts that central government debt will further increase to 43.7% of GDP in 2022. This debt-to-GDP ratio continues to rise in subsequent years.

The increase in debt-to-GDP ratio is forecast to reach 44.3% in 2023. Finally, the World Bank projects the debt-to-GDP ratio to be 44.4% in 2024.

(read: Slight Increase, Indonesia's Foreign Debt Reaches US$ 415,679 Million in July 2021)