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December 2, 2024 | 05:31 pm
TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati highlighted Indonesia’s success in maintaining economic stability post-pandemic. Despite global economic challenges, Indonesia has managed to keep inflation and government debt levels low.
She explained that Indonesia is relatively more resilient to various shocks as measured by growth rates, compared to the global landscape. “Indonesia's inflation rate is relatively lower, even compared to many high-income nations,” Sri emphasized during a speech at the opening of the Annual International Forum of Economic Development and Public Policy (AIFED) on Monday, December 2, 2024.
The finance minister revealed that the current inflation rate stands at 1.7 percent, lower than the 2 percent target, while many countries continue to grapple with high inflation.
The government, she said, continued to maintain prudent financial management, which positioned Indonesia as one of the fastest and shortest countries to achieve post-pandemic fiscal consolidation. “By maintaining a deficit below 3 percent and a relatively low debt-to-GDP ratio,” Sri said.
A November report from the Finance Ministry indicated that the debt-to-GDP ratio currently hovers around 38.66 percent. The government has set a safe limit of 60 percent for the debt-to-GDP ratio, as stipulated in Law Number 17 of 2003 concerning State Finances.
Meanwhile, government debt has reached Rp8,560 trillion. The IMF projects the average debt-to-GDP ratio over the next five years of the Prabowo administration to be around 40 percent, with a slight decrease to 39.57 percent by 2029.
Awalil Rizky, an economist at Bright Institute, considers this projection to be reasonable. He acknowledges the potential impact of external shocks which could lead to an increase in the debt ratio, such as the pandemic during President Jokowi's era.
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