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Govt plans to take on Rp 600t debt to cover 2024 budget deficit
The government said further borrowing was necessary to finance essential infrastructure projects and social programs.
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Finance Minister Sri Mulyani Indrawati (fourth right) pushes a button to symbolize the opening of trading activity at the London Stock Exchange on Jan. 29, 2018. (Tribunnews/Tribunnews)
T
he government is planning to take on new debt worth Rp 600 trillion (US$38.8 billion) in 2024 to cover a projected deficit in the state budget (APBN) set at 2.9 percent.
Deni Ridwan, director of bonds at the Finance Ministry’s Financial Risk Management Directorate General, said the additional debt would add to the government’s debt both in principal and interest payments. Currently, Indonesia’s debt-to-GDP ratio is about 37 percent, which Deni said was relatively low compared with other ASEAN nations.
He said further borrowing was necessary to finance essential infrastructure projects and social programs.
“Our debt has already increased in nominal terms, and with a projected average deficit of 2.9 percent next year, it could rise by another Rp 600 trillion if there are no reductions in the deficit,” Deni said at the Indonesia Stock Exchange (IDX) on Monday, as quoted by Antara.
The budget deficit set for 2024 is higher than the deficit target of 2.27 percent this year.
Read also: Govt to reduce bond issues in light of budget surplus
As previously reported, the government’s strategy for managing the budget deficit focuses on prudent debt management, debt cost efficiency through financial markets, and opting for selective loans that encourage infrastructure provision and transfers of technology.
Finance Minister Sri Mulyani stressed that the ministry remained committed to preserving the deficit ratio amid current global economic conditions. “We will use the government’s cash buffer to minimize financing risks and maintain the debt ratio at a safe level,” the minister said.
