SUKOHARJO, NNC — Finance Minister Sri Mulyani Indrawati said that Indonesia’s debt continued to decline year by year.
“In accordance with the regulations set forth in the financial law, every year we should not make debt more than three percent of our total economic cake,” she said at Public Lecture on Surakarta State Islamic Institute, Central Java, Saturday (5/26/2018).
According to Sri, Indonesia’s economic cake or gross domestic product (GDP) in Indonesia is currently IDR14,000 trillion. She said if in the previous year Indonesia’s debt was at 2.99 percent, last year it dropped to 2.55 percent, and this year again plunged to 2.19 percent.
“The government is targeting next year, our debt could fall two percent from the current figure,” she said.
Still under the Finance Law, she said, the maximum limit of total debt should not be greater than 60 percent of GDP in the country. Therefore, seeing the GDP of Indonesia is around IDR14,000 trillion, the maximum debt limit can reach IDR8,400 trillion.
“Whereas now our debt is about IDR4,000 trillion,” she said.
Related to that, she regretted many statements about state debt that seemed to discredit the government.
“This debt is not as arbitrary as the Minister of Finance [wants], everything is regulated in the law,” she said.
During the period, she said, Indonesia’s past debt has also been paid but there are new debt applications.
According to her, the new debt is the impact of the deficit in the domestic trade balance.
“The state revenues which among others are from taxes and grants amounted to IDR1,890 trillion, whereas for state expenditures around IDR2,200 trillion. In principle we have a deficit of around IDR325 trillion,” explained she.
She said the high demand for state spending cannot be separated from the many subsidies from the government that are still enjoyed by the community. On the other hand, the government also continues to fix the infrastructure for the ease of community life, including for the development of industry in the country, as reported by Antara.