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Jakarta Post

World Bank tells govt to ‘flatten the debt curve’

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Sat, May 23 2020   /  12:19 am

The World Bank has called on the Indonesian government to formulate a sound fiscal strategy to “flatten the debt curve” and maintain financial market confidence as debt mounts during the COVID-19 outbreak.

The ratio of Indonesia’s debt to its gross domestic product (GDP) is expected to rise to 37 percent this year, from 29.8 percent at the end of last year, driven by an increase in borrowing to cover the widening budget deficit and to cope with the economic slowdown, as well as the depreciation of the rupiah, said World Bank senior economist for Indonesia Ralph van Doorn.

“The government must [make clear its] fiscal strategy to raise revenues back to at least the 2018 level to flatten the debt curve,” Van Doorn told an audience during a discussion on Wednesday, adding that the country risked losing market confidence over its mounting debts.

“Indonesia mus...