Indef: 1 year Jokowi-Ma’ruf Amin leaves IDR 20.5 million in debt to each Indonesian citizen

Finance Minister Sri Mulyani Indrawati once again raised her voice on Indonesia’s rising debt. He explained that rising debt was a trend that was occurring globally amid the Covid-19 pandemic.

“Every country has seen an increase,” Sri Mulyani said in our state budget, on Monday (10/19/2020).

The minister explained that several countries, including Indonesia, must widen their budget deficits to mitigate the impact of Covid-19. According to him, the deficit will not only widen this year but will continue next year, so it will also affect the debt ratio.

For information, this year, the government has established a budget deficit of 6.34 percent and next year it is 5.7 percent.

“Indonesia with a deficit of 6.3 percent, our projected level of debt at 38.5 for this year. Next year, our budget deficit will be 5.7 percent,” the minister said.

Therefore, the ratio of debt to gross domestic product (GDP) also increases considerably. If previously the debt ratio of the Republic of Indonesia was always at the limit of 30 percent, this year it is expected to reach 38.5 percent. In fact, for next year the debt ratio will be higher, up to 41.8 percent.

For example, the Minister of Finance mentioned a number of countries that also increased their deficits. Like the United States (US), whose deficit in the second quarter is -18.7 percent and next year it is still -8.7 percent, which means that its debt ratio also increases to more 100 percent, that is, 131.2 percent and 133.6 percent in 2021.

Another country whose debt ratio also exceeds 100 percent is Japan, which is forecast to reach 266.2 percent of GDP this year and rise from 28.2 percent to 264 percent in 2021. Furthermore, it is forecast that Italy’s debt ratio this year will be 161.8 percent and next year it will be. 158.3 percent.

Similarly, with Canada, the debt ratio for this year is projected at 114.6 percent and next year at 115 percent, France this year is 118.7 percent and next year 118.6 percent. then Britain 108 percent to 111.5 percent next year.

“So if we see that all countries have a very high debt increase, even Germany is the one that is most careful about a large deficit increase,” he said.