As long as our state budget is in deficit, it means our revenue is still lower than our expenditure, and our nominal debt will increase
Jakarta (ANTARA) - The Finance Ministry emphasized that Indonesia had never defaulted on its debt since its independence in 1945 despite currently recording the highest debt value.

"Praise be to God, throughout its history, Indonesia never defaulted on its debt," Director of Government Bonds (SUN) of the ministry's Directorate General of Financing and Risk Management (DJPPR), Deni Ridwan, stated on Wednesday.

Ridwan made the remarks during the CNBC Money Talks on Location agenda here in response to former vice president Jusuf Kalla's statement regarding the national debt that he believed is surging.

“As long as our state budget is in deficit, it means our revenue is still lower than our expenditure, and our nominal debt will increase," the director noted.

He said that the current government's debt will always keep increasing due to accumulation from the previous government's debt.

However, despite the increasing debt, Indonesia's gross domestic product (GDP) is now at its highest since independence, thereby translating to the fact that the country is in a better position to pay off its debt, Ridwan emphasized.

Meanwhile, the director stressed that the current government could manage its debt properly, as was reflected by the safe proportion of national debt as compared to economic development.

He noted that Indonesia's debt value as per April 2023 was recorded at Rp7,849.89 trillion, decreasing by Rp28.19 trillion from the March 2023 value of Rp7,879.07 trillion. Hence, the Indonesian government's debt-to-GDP ratio is at 38.15 percent.

Indonesia's current debt-to-GDP ratio remains within the government's debt threshold set by Law No. 17 of 2003 on State Finance, which stipulates that the maximum national debt-to-GDP ratio level is at 60 percent and maximum state budget deficit at three percent of the national GDP, he remarked.

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Translator: Imamatul Silfia, Nabil Ihsan
Editor: Sri Haryati
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