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🇮🇩 Indonesia /Economy & Trade

Indonesia's debt ratio remains safe, tax rates will not increase: Finance Minister

From Republika · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Indonesia's debt-to-GDP ratio is projected to be 40.54% in 2025, remaining below the legal limit of 60%.
  • Finance Minister Purbaya Yudhi Sadewa assured that the national budget remains secure and controlled.
  • Strategies to manage debt include fiscal consolidation, optimizing revenue, improving spending quality, and active portfolio management.

Indonesian Finance Minister Purbaya Yudhi Sadewa has reassured the public that the nation's debt ratio remains manageable. For 2025, the debt-to-GDP ratio is projected at 40.54%, a slight increase from 39.81% in 2024, but still well within the legal maximum of 60% set by state finance law.

The government emphasizes that although the debt ratio is increasing from 39.81 percent of GDP in 2024 to 40.54 percent of GDP in 2025, this position is still far below the maximum limit of 60 percent of GDP according to the law, so our state budget remains secure and controlled.

— Purbaya Yudhi SadewaReassuring about the country's debt levels during a parliamentary session.

"The government emphasizes that although the debt ratio is increasing... our state budget remains secure and controlled," Sadewa stated during a parliamentary session. He addressed concerns raised by parliamentary factions regarding the rising debt ratio, outlining a four-pillar strategy for future debt management.

These pillars include gradual fiscal consolidation to strengthen the primary balance, optimizing state revenue, enhancing the quality of state spending, and actively managing the debt portfolio through methods like debt switching, buy-backs, and loan conversions. The government is optimistic that this approach will keep the debt ratio under control while ensuring fiscal sustainability and supporting development agendas.

With this strategy, the government is optimistic that the debt ratio can be controlled gradually while maintaining fiscal sustainability and our development agenda.

— Purbaya Yudhi SadewaExplaining the government's confidence in managing future debt.

As of March 31, 2026, Indonesia's government debt stood at Rp 9,920.42 trillion, or 40.75% of GDP. Sadewa highlighted that Indonesia's debt management is more cautious compared to other nations, citing higher ratios in countries like Singapore (around 180%) and Malaysia (around 60%). The majority of Indonesia's debt consists of government securities (SBN), with loans making up a smaller portion.

All high. We are among the most cautious compared to our neighboring countries.

— Purbaya Yudhi SadewaComparing Indonesia's debt management to other nations.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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