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Govt told to reduce its dependency on debt
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Finance Minister Sri Mulyani Indrawati (right) and Bank Indonesia Governor Agus Martowardojo attend a hearing with the House of Representatives budget committee in Jakarta on July 5. (Antara/M Agung Rajasa)
The government has been advised to reduce its dependency on foreign debt in trying to cover the deficit in the state budget.
Just to cover interest, the government had to allocate Rp 221 trillion (US$16.53 million) in 2017, said the Center for Reform on Economics (CORE Indonesia) in a statement on Wednesday.
CORE Indonesia records that in the last three years, the interest on debt increased by 18 percent on average, compared to the period between 2009 and 2014, when interest on debt only increased 7 percent in average.
“The government should improve the management of debt risk,” CORE Indonesia added.
Read also: Govt seeks Rp 467.3t deficit increase for infrastructure developmentPreviously, Finance Minister Sri Mulyani said government debt had reached Rp 3.67 quadrillion (US$274.23 billion) in April.
The data shows that when President Joko “Jokowi” Widodo took office in 2014, government debt was Rp 2.60 quadrillion, meaning that during the three years he has been in office, government debt has increased by Rp 1.07 quadrillion.
Meanwhile, the government is seeking to increase the budget deficit by Rp 467.3 trillion for development financing this year, as shown in the draft 2017 Revised State Budget under discussion by government officials and the House of Representatives.
CORE said that although Indonesia had received a good investment grade rating from several organizations, the government should not feel secure because the risk
