Research Article
Debt Sustainability Measurement Model in Indonesia using Fiscal Diagnostics
@INPROCEEDINGS{10.4108/eai.27-7-2021.2316847, author={Yozi Aulia Rahman and Dwi Rahmayani and Bayu Bagas Hapsoro}, title={Debt Sustainability Measurement Model in Indonesia using Fiscal Diagnostics}, proceedings={Proceedings of the 4th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2021, 27-28 July 2021, Semarang, Indonesia}, publisher={EAI}, proceedings_a={ICE-BEES}, year={2022}, month={3}, keywords={public debt debt sustainability fiscal diagnostics private sector indonesia}, doi={10.4108/eai.27-7-2021.2316847} }- Yozi Aulia Rahman
Dwi Rahmayani
Bayu Bagas Hapsoro
Year: 2022
Debt Sustainability Measurement Model in Indonesia using Fiscal Diagnostics
ICE-BEES
EAI
DOI: 10.4108/eai.27-7-2021.2316847
Abstract
The purpose of this study is to measure sustainable debt in Indonesia using fiscal diagnostics. We used secondary data, including data on GDP, government revenue, government debt, primary balance, government debt and private debt from 2010-2020. The source of the data is from Indonesian Statistics, Ministry of Finance and Bank Indonesia. This research method uses fiscal diagnostics which analyzes the development of data on the ability of the government and the private sector to pay debts and interest on their debts. The ability to pay the debt is identified from performance of fiscal indicators to GDP Indonesia, (ii) Debt sustainability indicators Indonesia with three measurements; a) public debt service to revenue ratio, (b) public debt interest to revenue ratio, (c) public debt to revenue ratio. The results show that the budget deficit is within safety limit, which is below 3%, but the effects of the Covid-19 pandemic have made the deficit widen to 6% in 2020. The three indicator of sustainable debt show that the debt burden is increasing and the fiscal capacity of the country is expected to struggle to pay off the debt.