Indonesia’s debt-to-GDP ratio will to 42% by 2029: report
Government programs launched in 2025 will increase state expenditure, says ASEAN+3 Macroeconomic Research Office
JAKARTA, Indonesia (MNTV) – Indonesia’s debt-to-GDP ratio is likely to reach 42% by 2029, says ASEAN+3 Macroeconomic Research Office (AMRO) in its Annual Consultation Report for the country.
The government aims to keep the debt ratio below 40% of GDP and reduce the fiscal deficit from 2.5% to 2.1-2.3% by 2029. “However, these medium-term fiscal targets have not yet incorporated initiatives introduced by the new Prabowo administration,” says the report.
AMRO mentions that the increase in debt occurs due to the primary balance deficit and higher borrowing costs. The institution anticipates that the new government programs launched in 2025 will increase state expenditure.
The government’s debt ratio in 2024 was recorded at 39.8 % of GDP. AMRO projects a gradual increase: 40.7% in 2025, 41.1% in 2026, 41.7% in 2028, and 42% in 2029.
Bank Indonesia, the country’s central bank, has reported that the government’s foreign debt in April 2025 grew by 10.4% to $208.8 billion.
Executive Director of the Communication Department of Bank Indonesia, Ramdan Denny Prakoso, stated that most of Indonesia’s foreign debt is long-term. “Indonesia’s foreign debt structure remains healthy, supported by the prudent principles of its management,” Denny said in an official statement on June 16.
It noted that the sectors benefiting from foreign debt include Health and Social Activities at 22.3%, Government Administration, Defense, and Mandatory Social Security at 18.7%, Education Services at 16.4%, Construction at 12%, and Transportation and Warehousing at 8.7%.
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