August 18, 2025 | 05:52 pm
TEMPO.CO, Jakarta - Indonesia's Finance Minister Sri Mulyani Indrawati has confirmed that the government’s debt-to-GDP ratio target for 2026 will remain at 39.96 percent, the same level maintained over the past three years.
However, economists from the Institute for Development of Economics and Finance (Indef) warn that the government’s debt burden will grow next year.
According to Indef’s estimates, total government debt obligations in 2026 will reach Rp1,433 trillion, higher than this year. This figure includes Rp833.9 trillion in maturing debt and Rp599.4 trillion in interest payments.
For comparison, in 2025 the government faced Rp800.3 trillion in maturing debt and Rp552.1 trillion in interest.
Riza Annisa Pujarama, a researcher at Indef’s Center for Macroeconomics and Finance, stressed that the rising costs deserve close attention. “Debt is acceptable, but we must reconsider the cost of borrowing, which is why caution is necessary,” she said in a public discussion on Monday, August 18, 2025.
Riza noted that while the debt-to-GDP ratio remains stable, the government’s repayment capacity must be considered.
“The interest burden is almost Rp 600 trillion, nearly 20 percent of central government spending,” she said.
Next year, the ratio of interest payments to tax revenue is projected at 22.27 percent, meaning nearly a quarter of tax receipts will be used just to cover interest. Riza warned that such funds could otherwise finance key programs like Free Nutritious Meals and other government priorities. “The opportunity cost of these interest payments is very high for us,” she added.
The growing burden is partly due to high yields on government bonds (SBN). In 2026, the 10-year SBN yield is projected at 6.9 percent, still the highest in ASEAN. “This makes borrowing more expensive for us,” Riza explained.
Indef’s Director of Big Data Development, Eko Listiyanto, argued that the government should push for lower SBN yields. Based on Trading Economics data, Indonesia’s 10-year SBN yield in August 2025 stood at 6.39 percent, lower than the government’s 2025 target of 7 percent.
Eko criticized the government for lacking optimism in its fiscal outlook.
“SBN yields remain high, while the government is focused on reducing the 2026 deficit. We should aim to bring yields down, showing a clear improvement from the 2025 State Budget. If our economy strengthens, we’ll have the bargaining power to push yields even lower,” he said.
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