Jakarta. Finance Minister Purbaya Yudhi Sadewa on Tuesday pledged to reduce Indonesia’s reliance on foreign debt by pursuing fiscal policies that prioritize stronger economic growth.

Purbaya argued that higher growth would naturally reduce the need for new borrowing. “I will push for faster economic growth so that with the same state budget, we can generate higher tax revenues. Ideally, this will prevent us from taking on excessive debt,” he said in Jakarta.

According to ministry estimates, every additional one percentage point of economic growth could boost state revenues by about Rp 220 trillion ($13 billion).

Still, Purbaya stressed that fiscal policy would remain flexible when it comes to borrowing. “If the economy is strong, we don’t need much debt. But if the economy needs stimulus, we will provide it -- even if that means taking on more debt. Debt limits should not be rigid; they must adapt to economic conditions,” he explained.

He added that Indonesia’s debt-to-GDP ratio remains within a safe range at around 38-40 percent. “Our position is very safe. If rating agencies question it, just compare with advanced economies. Germany is nearly 100 percent, the United States is above 120 percent, and Japan is even at 250 percent,” he said.

Purbaya stressed that macroeconomic stability and sociopolitical resilience are critical prerequisites for accelerating growth. Fiscal discipline and spending controls, he said, would continue without undermining development goals.

“We need macroeconomic stability to drive faster growth. That is why we will reduce dependence on foreign debt and rely more on revenues generated by growth,” he concluded.

As of July 2025, Indonesia’s government foreign debt stood at $211.7 billion, up 9 percent from a year earlier. Including private sector borrowing, total external debt reached $432.5 billion. This year, the government has budgeted around $34 billion solely for interest payments on external debt, according to Finance Ministry projections.

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