Managing debt has become a central focus for the Indonesian government as the country’s total debt reached IDR 9,138 trillion as of June 2025. Finance Minister Purbaya Yudhi Sadewa addressed public concern by assuring that Indonesia’s fiscal position remains strong and well-managed. He emphasized that the government has a clear plan to maintain fiscal stability, enhance efficiency in spending, and strengthen the economy’s capacity to handle future obligations.
Purbaya stated that Indonesia’s fiscal condition is still safe, saying there is no reason for panic. “Why are you worried about the debt?” he asked during a discussion with INDEF economist Aviliani at the Sarasehan 100 Ekonom Indonesia event in Jakarta. “Who said we don’t have enough money? If you understand fiscal management, you know there are ratios that show whether a country can pay its debt — it’s about willingness and ability” He said.
Purbaya’s Strategy to Strengthen Indonesia’s Debt Management
Finance Minister Purbaya Yudhi Sadewa has introduced several strategies to reinforce Indonesia’s Debt Management. He plans to focus on efficient budget spending, accelerating economic growth, and improving the tax-to-GDP ratio. According to him, these efforts will reduce the fiscal deficit and enhance state revenue.
“The first strategy is to ensure government spending is accurate, timely, without leakage, and that it maximizes its impact on the economy,” Purbaya said at the Ministry of Finance office. He explained that effective budget distribution will drive economic growth, which in turn increases tax collection and reduces the budget deficit.
Purbaya aims for a significant improvement in the tax-to-GDP ratio within the next few months, supported by stronger tax and customs revenue as well as robust real-sector growth. “Going forward, if the economy grows faster and we see improvements in tax, customs, and excise collection, we can expect the tax-to-GDP ratio to improve,” he explained.
Fiscal Stability and Global Debt Comparisons
Purbaya emphasized that Indonesia’s fiscal position remains within a safe range compared to international standards. He cited that rating agencies evaluate fiscal strength through two main indicators: the deficit-to-GDP ratio and the debt-to-GDP ratio. In this context, Indonesia remains in a healthy position.
“Let’s look at the strictest standard — the Maastricht Treaty. What’s the acceptable deficit-to-GDP ratio? Three percent. And the safe debt-to-GDP ratio? Sixty percent. Where are we? Our deficit is below 3 percent, and our debt ratio is below 40 percent. So even by the world’s strictest standards, we’re still prudent,” he said, as reported by CNN Indonesia.
He also compared Indonesia’s debt ratio to major economies such as Japan, the United States, Europe, and Singapore, noting that Indonesia’s debt-to-GDP ratio of 39.86 percent remains well below their levels. “So by that measure, we’re safe. So there’s no need to panic,” Purbaya added.
Boosting Growth Through Fiscal Efficiency
Purbaya believes that fiscal efficiency and real-sector performance will further strengthen the economy. He estimated that a stronger real sector could increase the tax ratio by 0.5 to 1 percent, translating to at least IDR 100 trillion in additional revenue.
“So I hope the real sector continues to grow with effort. That’s why I’m working to ensure that obstacles in the real sector can be significantly reduced,” he said. He stressed that fiscal reforms and better spending management are key to driving sustainable growth without adding excessive debt.
Public Confidence and Future Outlook for Indonesia Debt Management
Purbaya reaffirmed that Indonesia remains fiscally disciplined and capable of managing its obligations responsibly. He assured that the government will maintain its commitment to keeping the deficit-to-GDP ratio under 3 percent. “We’ve educated the public that we’re safe. And I won’t allow the deficit-to-GDP ratio to exceed 3 percent. That won’t change anytime soon. I’ll keep it that way — this year and next year,” he stated.
He added that once the economy achieves stronger growth, the government may adopt a more flexible approach to debt management. “If our growth reaches 7 percent, for example, then we can evaluate. Should we reduce taxes? Should we cut debt? Or should we increase it to reach 8 percent growth? But the calculations must be clear on paper,” he explained.
Ensuring Fiscal Discipline and Economic Resilience
Finance Minister Purbaya’s approach to Indonesia’s Debt Management highlights a balance between fiscal prudence and economic expansion. Through efficient spending, improved tax collection, and controlled deficits, the government aims to maintain fiscal stability while driving long-term growth. As Purbaya assured, Indonesia’s debt position remains strong, resilient, and aligned with international standards, ensuring continued confidence in the nation’s financial health.
Source: cnnindonesia.com, pasardana.id
Image: okezone.com
