DIGIVESTASI - The Institute for Development of Economics and Finance (INDEF) has criticized President Joko Widodo for the legacy of a 'mountain of debt' that will be passed on to the elected president for the 2024-2029 period, Prabowo Subianto. A researcher from the Center of Industry, Trade, and Investment at INDEF, Ariyo DP Irhamna, highlighted a significant increase in government debt interest payments, marking the largest rise since 2022.

"Debt interest payments have now even surpassed personnel spending. This is a warning for the government because debt interest payments have exceeded personnel spending since 2022," he said during an INDEF public discussion held virtually on Sunday (August 18).

Ariyo added that this situation restricts fiscal space for the new government in 2025 and, according to him, represents a negative legacy from President Jokowi's leadership for Prabowo.

Meanwhile, a researcher from the Center of Macroeconomics and Finance at INDEF, Riza Annisa Pujarama, revealed that Prabowo will face maturing debt payments amounting to IDR 800.33 trillion in 2025. Of this amount, IDR 705.5 trillion comes from the issuance of government bonds (SBN), and the remaining IDR 94.83 trillion from loans.

This figure does not include debt interest, which will reach IDR 552.85 trillion in 2025. When combined, the total maturing debt and interest that must be paid in Prabowo's first year of governance will amount to IDR 1,353.1 trillion.

Riza also warned that the larger the debt financing, the more the government will have to pay in interest. Worse yet, the 2025 Draft State Budget (RAPBN) is also heavily reliant on debt. She pointed out the widening state budget deficit, with a target deficit of 2.53 percent or IDR 616.2 trillion in the 2025 State Budget.

"The 2024 State Budget deficit is projected at 2.29 percent, but in the 2024 outlook, it increases to 2.7 percent. We are still very dependent on debt," Riza criticized.

Riza also highlighted Indonesia's high debt costs in Asia. Compared to ASEAN countries, Indonesia has a very high cost of borrowing, reaching 6.7 percent, only slightly lower than India's at 6.8 percent.

Debt payments due during the 2026-2029 period are also projected to be significant, with details showing IDR 803.19 trillion in 2026, IDR 802.61 trillion in 2027, IDR 719.81 trillion in 2028, and IDR 632.3 trillion in 2029, which will be at the end of Prabowo Subianto's term.

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