Facing Global Dynamics, Government Pushes Fiscal Strengthening and National Economic Transformation
The fiscal space of the State Revenue and Expenditure Budget (APBN) is considered increasingly limited due to the rising government debt burden and the structural economic challenges still faced by Indonesia. Therefore, strategic steps are needed through strengthening fiscal discipline, economic diplomacy, and accelerating real sector transformation to maintain national economic resilience.
Member of Commission XI of the Indonesian House of Representatives, Kamrussamad, stated that the government’s total debt has reached approximately Rp 8,000 trillion, creating significant annual obligations for principal and interest payments. “With an average interest rate of around 6 percent, the burden of debt interest payments becomes very large and puts pressure on the APBN,” he said on Thursday, 18 June 2026.
According to him, this condition demands the government take strategic steps through economic diplomacy, especially in negotiating with international creditors regarding interest rates and loan tenors amidst global economic uncertainty. “Diplomacy is needed to renegotiate interest rates and loan tenors, considering the current uncertain global economic conditions,” he stated.
Nevertheless, Kamrussamad noted a positive development in the structure of government debt financing. He mentioned that the composition of debt is now increasingly dominated by domestic investors, indicating a growing role for the public in financing national development, including through the purchase of Government Securities (SBN). “This is something to be grateful for because it shows that the Indonesian people are participating in financing national development,” he said.
He also reminded of the importance of maintaining fiscal discipline, particularly regarding the budget deficit limit set by law at a maximum of 3 percent of Gross Domestic Product (GDP). In the first quarter of 2026, the APBN deficit was recorded at around 0.91 percent and subsequently improved to approximately 0.8 percent. “Going forward, continuous improvement is expected as the financial sector begins to move and credit distribution to the business world increases,” he stated.
Meanwhile, Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian assessed that the weakening of the rupiah exchange rate over the past decade reflects unresolved structural problems in the Indonesian economy. “In the early period, the rupiah exchange rate was around Rp12,000 per US dollar. In less than 10 years, there has been a depreciation of around 26 to 31 percent,” said Fakhrul.