Indonesia: Government’s Debt Manageable, Analyst Says

• Apr 26, 2017

TEMPO.CO, Jakarta – The increase in government`s debt is manageable, an economic analyst at the University of Indonesia (UI) Lana Soelistianingsih said. Lana said that the focus should not be put on the amount, but on the debt-to-GDP ratio, which remains at 30 percent.

“We should look at its debt to service ratio, which is still around 30 percent,” he told Tempo in a phone interview on Tuesday, April 25, 2017.

The government debt as at March 2017 amounted to Rp3,649.75 trillion. Lana added that Indonesia’s gross domestic product (GDP) stands at roughly Rp12 trillion. According to her, the Indonesian government has never defaulted on its loans.

She said that Bank Indonesia’s hedging regulations will also help manage government debt. For example, she said, a hedging policy may be adopted to maintain debt sustainability.

Moreover, Lana suggests the expected more debts could have an impact on national development that may lead to improving national revenue.

According to Directorate General of Financing and Risk Management (DJPPR), the government’s debt at December 2016 stood at Rp3,466.96 trillion, a Rp301.83 trillion increase compared to that of 2015 at Rp3,165.13 trillion.

Source: https://en.tempo.co/read/news/2017/04/26/056869546/Governments-Debt-Manageable-Analyst-Says