DIGIVESTASI - The issue of Indonesia's foreign debt was one of the hot issues discussed in the presidential candidate debate last weekend. During the debate, presidential candidate number 2, Prabowo Subianto, said that Indonesia's debt was at a safe level. 

This can be seen from the debt-to-GDP ratio, which is still very low, so Indonesia is respected. According to Prabowo, a debt ratio of 50% of gross domestic product (GDP) is not a big problem. "We can reach 50%, no problem, we have never defaulted, we are respected by the world," he said during the third presidential debate at Istora Senayan, Jakarta.

Meanwhile, government debt has reached Rp8,041 trillion as of November 2023, equivalent to around 38.11% of gross domestic product (GDP). Indonesia's debt ratio is relatively lower than in 2022 and 2021, which were 38.65% and 41%, respectively. In fact, in November, the debt-to-GDP ratio was at its lowest level since 2019.  

Furthermore, the ratio is still considered normal and in accordance with the law. As per Decree No. 17/2003 on State Finance, the government sets a maximum debt-to-GDP ratio of 60%.

Meanwhile, other countries such as Japan have a much higher debt-to-GDP ratio than Indonesia, even above 200%.  Data from the International Monetary Fund (IMF) shows that Japan is still the country with the highest ratio of debt to gross domestic product (GDP) in the world. Japan's debt-to-GDP ratio reached 226.4% of GDP, equivalent to 1.27 trillion yen in March 2023 (9.57 trillion USD). 

Despite Japan's high government debt ratio, domestic investors still control the Sakura State's debt holdings, which relatively protects the country from external shocks. The largest owner is the central bank of Japan (BOJ) which controls 53.34% of public debt. Japanese citizens are also among the largest holders of government bonds.

As for Uncle Sam's country, the debt-to-GDP ratio is also much higher than Indonesia, although still lower than Japan.  The United States (US) has a debt of US$33 trillion (more than Rp 500 trillion). The country's debt has grown 89% faster since the pandemic began. 

Currently, the US debt ratio has exceeded 100%. This means that the debt limit has been reached and the US Treasury can no longer issue bonds to finance its spending. From year to year, the debt of superpowers continues to increase as budget deficits continue to rise and increase in the 21st century. The United States is also listed as the most indebted country in the world. . 

Meanwhile, neighboring ASEAN countries such as Malaysia, Thailand, and the Philippines have an average debt-to-GDP ratio of around 60%. The highest figure recorded by Singapore is around 168%.