Three Years of Jokowi-JK, Government Foreign Debt Increases by 35 Percent

Indonesia's external debt (ED) for the government and Bank Indonesia (BI) increased by US$45.2 billion, or 34.8 percent, during the three years of President Joko Widodo and Vice President Jusuf Kalla's administration. BI data recorded that the government's external debt in August 2017 amounted to US$174.94 billion, equivalent to Rp2,361.7 trillion (using an exchange rate of Rp13,500 per US dollar), compared to US$129.74 billion in 2014. This represents an average annual increase of more than 10 percent.

The government's ED reached US$171.16 billion, while the central bank's ED amounted to US$3.78 billion. Sixty-eight percent of the government's ED, or US$116.3 billion, consists of State Bonds (SBN). This comprises US$57.49 billion in international SBNs and US$58.8 billion in domestic SBNs. Low tax revenue and high government spending have led to the continuous issuance of SBNs to finance expenditure and cover budget deficits.

The ratio of the government's ED to Gross Domestic Product (GDP) at the end of August reached 34.4 percent, which is still considered safe and significantly lower than the debt ratios of developed countries. However, this substantial debt must be managed carefully and prudently to prevent it from becoming a time bomb in the future.