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Economy in brief: IMF’s global call on debt irrelevant to RI
Finance Minister Sri Mulyani Indrawati has said the International Monetary Fund’s call for governments around the world to reduce foreign debt was irrelevant to Indonesia because the country’s debt-to-GDP ratio was low
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span>Finance Minister Sri Mulyani Indrawati has said the International Monetary Fund’s call for governments around the world to reduce foreign debt was irrelevant to Indonesia because the country’s debt-to-GDP ratio was low.
“Indonesia’s debt-to-GDP ratio is only 30 percent. This is low [compared to] the international standard,” Sri Mulyani said on Tuesday as quoted by kontan.co.id. She also highlighted Indonesia’s good macroeconomic condition: economic growth above 5 percent, 3 percent inflation and a state budget deficit of 1.76 percent.
“Meanwhile, Indonesia’s economic growth is more than 5 percent, while the state budget deficit is less than 2 percent. Therefore, the [IMF’s call] is irrelevant to Indonesia,” she said.
Sri Mulyani said the IMF’s call addressed only those countries with a high debt-to-GDP ratio.
“There are advanced countries, like those in Europe, whose debt-to-GDP ratio reach 60 percent, 80 percent, even 100 percent. Such countries need to undertake fiscal consolidation,” she said. “There are countries with a debt-to-GDP ratio of above 60 percent and a state budget deficit of 2 percent, like Italy.”
