Indonesia's Debt Ratio Reaches 41 Percent: Is It Still Safe?

The Ministry of Finance reported that Indonesia's debt reached Rp 6.91 quadrillion in December 2021. Meanwhile, the debt-to-Gross Domestic Product (GDP) ratio last year reached 41%.

According to its composition, Rp 6.09 quadrillion (88.15%) of the debt was in the form of government securities (Surat Berharga Negara or SBN) at the end of last year. The remaining Rp 818.56 trillion (11.85%) was in the form of loans.

Government debt increased by Rp 834.31 trillion (13.73%) throughout last year compared to 2020. Compared to the end of 2019, before the Covid-19 pandemic, government debt increased by Rp 2.13 quadrillion (44.56%).

The value of government debt is the highest in history, as shown in the graph. The ratio of government debt to GDP is also the highest in the last 16 years (since 2006).

Although the value of government debt is very large, Indonesia's debt ratio remains below the maximum limit stipulated in Law No. 17/2003 concerning State Finance, which is 60 percent of GDP.

Indonesia's government debt ratio is lower than that of developed countries. Based on data from Tradingeconomics, the government debt ratio was 38.5% at the end of 2020. This figure is lower than the debt ratios of major countries such as Japan (266% of GDP), Italy (156%), Singapore (131%), the United States (128%), and China (66.8%).