Government Debt

Despite the latest Bank Indonesia figures showing that government debt has risen by 10.3% yoy and now stands at a whopping 2,521 trillion rupiah, the administration of President Joko Widodo insists that because the money is being used for infrastructure projects it will in turn spur economic growth.

Economists however say most of the money is being spent on the civil service and bloated bureaucracy (which many cite as one of the factors inhibiting economic growth), with as much as 366 trillion rupiah projected to be spent in 2018, an increase of 28% since 2014.

Spending on infrastructure meanwhile is only 204 trillion rupiah or a 36% increase since 2014. Spending on social assistance meanwhile has declined by 44% since 2014 with projected expenditure for 2018 standing at only 81 trillion rupiah.

Kompas - June 18, 2018