Is Indonesia Facing a Debt Emergency?

Is Indonesia in a debt crisis? Data from the Ministry of Finance shows that Indonesia's debt-to-Gross Domestic Product (GDP) ratio reached 28 percent in 2016. This figure is significantly lower than the debt ratios of developed countries such as Japan (239 percent) and the United States (107 percent). It is also lower than other ASEAN countries, including Malaysia (56 percent), Thailand (42 percent), and the Philippines (34 percent).

Indonesia's total debt as of June 2017 reached Rp 3,706.52 trillion. This comprises loans totaling Rp 727.02 trillion and State Bonds (SBN) of Rp 2,979.5 trillion. While the value of government debt shows a continuous increase, the low debt-to-GDP ratio indicates that Indonesia's debt remains manageable. The crucial aspect is the effective management and allocation of debt funds to productive sectors, stimulating economic growth and preventing future burdens.

Indonesia's per capita debt in 2016 was US$1 million, while its per capita GDP was US$3.6 million. Furthermore, the interest burden on government spending at 8.3 percent is lower than that of comparable countries such as Mexico (9.7 percent), the Philippines (16.7 percent), and Brazil (33.2 percent).