Jakarta. Government borrowing surged to Rp 349.3 trillion ($21.4 billion) in the first five months of 2025, marking a 164 percent increase from Rp 132.2 trillion in the same period last year. The spike reflects intensifying fiscal pressure as the government tries to maintain budgetary health under growing spending demands.

Deputy Finance Minister Thomas Djiwandono said the government had already spent Rp 324.8 trillion in total budget financing as of the end of May, amounting to 52.7 percent of the Rp 616.2 trillion financing target set under the 2025 state budget (APBN).

“Of that, Rp 349.3 trillion came from debt financing, while non-debt financing stood at negative Rp 24.5 trillion. This negative figure reflects investments in specific sectors, not additional borrowing,” Thomas explained at a press briefing on the state budget at the Finance Ministry in Jakarta on Tuesday.

He stressed that the negative non-debt financing figure should not be interpreted as new liabilities. “It’s important to underline that this is not about adding debt,” he said.

Despite the jump in borrowing, the Finance Ministry insists the government's debt strategy remains cautious and calculated. “We are implementing a flexible, measured financing strategy, considering timing, instruments, and currency composition,” Thomas said, adding that prefunding mechanisms, strong cash buffers, and sustainable debt and treasury management bolster the approach.

Finance Minister Sri Mulyani Indrawati acknowledged the growing global headwinds but said Indonesia’s fiscal policy remains on a sound footing. She underscored the importance of maintaining the primary balance and deficit design laid out in the State Budget Law.

“The APBN continues to function as a key policy tool, even amid increasing global pressures,” she said. “Indonesia has managed to preserve economic stability and maintain a responsive yet disciplined fiscal policy.”

Sri Mulyani noted that the government recorded a higher primary surplus in May compared to April --Rp 192.1 trillion versus Rp 173 trillion-- signaling adherence to the budget’s projected 2.53 percent deficit trajectory.

Still, the rapid increase in government debt has sparked questions over future fiscal space, especially if global pressures escalate and revenue growth slows due to an economic downturn.