How Can Indonesia Pay its Rp 605,3 Trillion Debt?

Liputan6.com, Jakarta In spite of numerous ambitions placed particularly in the Indonesian economic sector, it cannot be denied that the government remains worry over the climate which reigns this sector in the future. A number of sectors ought to be taken into serious account. The General Directorate for Financing and Risk Management (DJPPR) however, remains optimistic in trying to cover the national debt which reportedly reached Rp. 605,3 trillion up until next year.

The Indonesian Minister of Finance, Bambang Brodjonegoro is clouded with pessimism over the overall Indonesian economy in the following year as the global economic climate is evidently unpromising. Such pessimism is rooted down to the volatility in which American Central Bank presents including the escalating interest of Fed Fund Rate together with China's economic slow-down and commodity prices.

"In 2016, our economic condition could not be seen as a prospect that is mostly positive and therefore we ought to remain cautious about any kind of unwanted possibility hindering this sector," said Bambang at the Indonesian Ministry of Finance building, in Jakarta, Monday (7/12/2015)

Minister Bambang admits that the global economy as well as the Indonesian national economy will continue to be haunted and subjugated by the prolonging of Fed Fund Rate in 2016 as the Federal Reserves reportedly plans to make several adjustment to its rate of interest by 200-300 Bps.

Apart from that, China’s economic slow-down is potentially a permanent one.

“Profound paradigm alteration and China’s economic growth in the future would no longer stand at 10%. Normally, it would grow only by 6-7%. Despite such reduction, the number is still considered as second highest in the world in terms of its Gross Domestic Product,” Bambang explained.

Another factor that Minister Bambang identifies is the price of commodity which he predicts still largely unpromising. OPEC countries have not reached agreement in trying to raise the price of oil. According to Bambang, the Indonesian government ought to attract more investors and maintain peoples’ purchasing power with the growth of consumption target of 5%.

“So, in this particular condition, we still think that our budget ought to remain expansive because covering the debt is highly critical. We are rest assured that the Finance Ministry, with its experience has the capability of doing its job well in addressing the national debt issue. Despite volatility of global economy due to narrowed window of opportunity from foreign injection, more auction should take place. We are now placed in an increasingly competitive economic environment and we have to compete with other nations who are also seeking ways to cover their own debt,” he further explained.