Indonesia’s economy is still safe despite its debt through 4000 Trillion

Currently, the Government’s total debt per February amounts to Rp 4,034 trillion or 29.2 percent of GDP. In the State Finance Law Number 13 Year 2003 also the boundary between the Government’s secure debt has been pegged to a maximum of 60 percent of GDP.

Member of the House of Representatives Commission XI MuhammadJ Romahurmuziy, said there is no country in the world who do not owe. As long as for productive activities actually debt is not a forbidden thing. Because far below the maximum limit of debt should be debate about the debt does not need to be made noisy.

When compared with Japan, its debt ratio is higher than Indonesia reached 230 percent, while Indonesia only 29.2 percent. This means that Indonesia’s debt ratio is still very safe. In addition, the interest rate of government debt is currently pegged 6.62 percent is still high compared to Japan which is only 0.03 percent.

“Indonesia’s interest is expensive because of high inflation of 3.6 percent in 2017, while Japan inflation was negative (deflation) or below 0 percent.Including inflation will determine the return or the real yield received by investors, the higher inflasinya the higher interest demand from investors buyers of bonds, “he explained.

Gus Romi asserted during the era of Jokowi-JK Government debt was also used for economic development. This is evident from the increase in infrastructure spending from Rp 290 trillion in 2015 to Rp 410 trillion in 2018. The impact of massive infrastructure development has been positively correlated with the rise in Indonesia’s competitiveness.

Based on the Global Competitiveness Index released by the World Economic Forum, the ranking of Indonesia’s competitiveness rose 5 ranks from 41 in 2016 to 36 in 2017. This jump in competitiveness would not have been possible had it not been for a debt injection to build infrastructure.

He also explained the Government’s foreign debt increased by 14 percent in 2017, but the economy grew only 5.07 percent. When compared with Malaysia and Vietnam, he said no apple to apple or not the same.

“The scale of Indonesia’s economy is so great that it should be compared to the G20.Best compared to G20 countries, Indonesia is ranked number three of the highest growth, below China 6.9 percent and India 6.7 percent in 2017. We should be proud to grow 5 percent though not yet optimal, “Romi said

“So the conclusion is that the Government is still on the track using debt for infrastructure development Debt in the era of President Jokowi is managed professionally and carefully The next challenge is to reduce the inflation rate so that the debt interest is cheaper.Another important step is to increase the economic fundamentals to the rating debt could be AAA from nowadays BBB- If the debt rating gets better, and the impact of future infrastructure development will be felt by the public, the noise about this debt will be abandoned, “he concluded.

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