Government Debt Reaches Rp6,570.17 Trillion in July 2021

The Ministry of Finance (Kemenkeu) recorded government debt of Rp 6,570.17 trillion in July 2021. This figure is equivalent to 40.51% of the Gross Domestic Product (GDP).

Government debt in July 2021 increased by 20.9% compared to the same period last year, which was Rp 5,434.86 trillion. Furthermore, the government debt-to-GDP ratio is higher than in July 2020, which was 33.63%. This is due to the Indonesian economy still being in the recovery phase following the Covid-19 pandemic.

Rp 5,727.71 trillion, or 87.18% of government debt, is in the form of State Bonds (SBN). This comprises Rp 4,437.61 trillion in domestic SBN and Rp 1,290.09 trillion in foreign currency (valas) SBN.

Meanwhile, Rp 842.46 trillion, or 12.82% of government debt, comes from loans. Of this amount, Rp 12.7 trillion is from domestic sources.

The government also has Rp 829.76 trillion in loans from foreign sources. This includes Rp 312.64 trillion in bilateral loans, Rp 474.39 trillion in multilateral loans, and Rp 42.73 trillion in commercial bank loans.

Kemenkeu stated that several steps are being taken to minimize government debt risks. One of these is utilizing the flexibility of debt instruments through foreign loans, which are more cost-efficient.

Kemenkeu is also utilizing Bank Indonesia's support as a standby buyer to reduce debt costs. Furthermore, it is maintaining a larger proportion of domestic debt compared to foreign currency debt.

Finally, it is promoting financing for several projects using the government and business entity cooperation (KPBU) scheme and blended financing. Both schemes allow the private sector to participate in several infrastructure projects domestically.