Indonesia's US$443 billion debt remains at safe level: Purbaya

Jakarta (ANTARA) - Finance Minister Purbaya Yudhi Sadewa said Indonesia's government debt remains manageable despite exceeding Rp8,000 trillion (about US$443.3 billion), citing the country's relatively low debt-to-GDP ratio and stable sovereign credit rating.

Speaking at the Presidential Palace in Jakarta on Wednesday, Purbaya said a country's debt should be assessed relative to the size of its economy rather than by its nominal value.

"We always compare it with the size of the economy, not just the nominal value," he said.

Purbaya said the debt-to-gross domestic product (GDP) ratio is the standard measure of fiscal sustainability.

Indonesia's debt-to-GDP ratio stands at about 40 percent, well below the 60 percent threshold set under the country's fiscal framework, he said.

"So, in fiscal terms, debt should remain below 60 percent. We are still at around 40 percent, well below that limit," Purbaya said.

He compared Indonesia's debt level with several advanced economies that carry substantially higher debt burdens relative to GDP.

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According to Purbaya, the United States has a debt-to-GDP ratio above 100 percent, Germany above 60 percent, Singapore around 175 percent and Japan about 275 percent.

He said Indonesia's fiscal position remains sound and does not warrant concerns over its ability to meet debt obligations.

Purbaya said that assessment is reflected in Standard & Poor's decision to maintain Indonesia's sovereign credit rating at BBB with a stable outlook.

He added that rating agencies would likely revise the outlook or downgrade the rating if they believed Indonesia's debt-servicing capacity had materially weakened.

"If we were considered unable to meet our obligations, the outlook would become unstable or negative, or the rating could be downgraded," he said.

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Translator: Maria Cicilia Galuh Prayudhia, Yashinta Difa

Editor: Rahmad Nasution

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