Politics · Indonesia · 2 hrs ago
Indonesia plans year-end borrowing to cover a projected budget deficit
Indonesia’s Finance Ministry expects the country’s 2026 budget deficit to reach 2.85% of gross domestic product by year-end.
A budget deficit means the government expects to spend more than it collects.
To cover its remaining financing needs, the government plans 12 regular bond auctions in the fourth quarter: six government bond sales and six Islamic bond sales.
It also plans to issue retail savings bonds and savings sukuk.
The government may sell foreign-currency bonds, depending on global market conditions.
It says it could also draw US$1.8 billion in program loans from bilateral and multilateral lenders during the quarter.
By the end of September, it had raised Rp494.3 trillion in new debt, equal to 59.4% of its annual target.
Indonesia’s Finance Ministry projects the state budget deficit will reach 2.85% of gross domestic product by the end of 2026.
The government plans to hold 12 regular government securities auctions in the fourth quarter to help meet its financing needs.
It also plans retail bond and sukuk issuances and may borrow US$1.8 billion from bilateral and multilateral lenders.
A foreign-currency bond issuance remains possible, depending on global market conditions.
By the end of September, new borrowing was reported at Rp494.3 trillion, or 59.4% of the annual target.
- Who
- Indonesia’s government, represented by the Finance Ministry.
- What
- It plans year-end borrowing and securities issuances to finance a projected budget deficit of 2.85% of GDP.
- When
- The planned financing is for the fourth quarter of 2026.
- Where
- Indonesia. The announcement was made at the Finance Ministry office in Jakarta.
- Why
- To meet the state budget’s remaining financing needs amid the projected deficit.
This story does not have two clearly opposing sides.
Our strategy at this time is to meet the state budget financing needs with a deficit scenario of 2.85%.
We still have a schedule of 12 regular government securities auctions every Tuesday. So six auctions of government bonds and six auctions of government sharia securities in the fourth quarter.
In addition, we still have the potential to draw US$1.8 billion in program loans from bilateral and multilateral lenders, ready to be drawn in the fourth quarter.
We are paying close attention to the government securities market and also the global economic conditions around the world.
The government had drawn Rp494.3 trillion in new debt, equal to 59.4% of its Rp832.2 trillion target.
The government scheduled 12 regular securities auctions, six for government bonds and six for government sharia securities.
The government said it could draw US$1.8 billion in program loans from bilateral and multilateral lenders.
Finance Ministry official Suminto discussed the government’s financing plans at a budget press conference.
- Projected deficit
- 2.85% of GDP
- Regular securities auctions
- 12 in the fourth quarter of 2026
- Auction breakdown
- 6 government bond auctions and 6 government sharia security auctions
- Potential program loans
- US$1.8 billion
- New debt drawn by end-September
- Rp494.3 trillion, or 59.4% of the Rp832.2 trillion target
Sources
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