Indonesia Debt Nears 41 Percent of GDP, Minister Says Risks Remain Contained

JAKARTA, Investortrust.id — Indonesia’s debt load is edging higher, but Finance Minister Purbaya Yudhi Sadewa insists the government remains firmly in control.

As of Dec. 31, 2025, public debt stood at Rp 9,637.9 trillion, or 40.46 percent of gross domestic product, according to the Finance Ministry’s Directorate General of Financing and Risk Management.

The figure places Southeast Asia’s largest economy near the 41 percent mark, a level that has drawn scrutiny from lawmakers and investors alike as the government pushes fiscal stimulus to sustain growth.

"By standard measures, we are still safe," Purbaya said Wednesday after a coordination meeting with a House of Representatives disaster recovery task force in Jakarta.

The debt stock consisted primarily of government bonds, known as Indonesian Government Securities (SBN), which accounted for Rp 8,387.23 trillion, or 87.02 percent of the total. Loans made up the remaining Rp 1,250.67 trillion.

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The heavy reliance on bond issuance reflected the government’s preference for market-based financing over bilateral or multilateral borrowing, a strategy officials have long argued reduces currency risk and strengthens domestic capital markets.

Purbaya said Indonesia’s debt ratio remained well below that of regional peers such as Singapore, Malaysia and Thailand.

He added that the government had maintained the state budget deficit below the legally mandated ceiling of 3 percent of GDP, a fiscal rule reinstated after pandemic-era flexibility.

"Our strategy was to maximize the available deficit space to ensure the economy turned around in the fourth quarter last year, and it worked," he said.

The former chairman of the Deposit Insurance Corporation described the approach as calibrated rather than expansionary, arguing that stimulus had been deployed without breaching fiscal discipline.

"We did not cross the deficit limit, but we provided stimulus so the domestic economy could reverse course," he said.

The minister also acknowledged the turbulence that struck in late third quarter 2025, when large-scale protests rattled markets and dampened business sentiment.

Looking ahead, he said, the challenge would be to steer growth without repeating that instability. "We will manage the pace carefully so the economy does not face the same shock again," Purbaya said.