ASEAN — Indonesia's government faces a debt maturity burden of 833.96 trillion rupiah in 2026, the largest in the country's modern history. Central government debt is nearing 10 quadrillion rupiah, equivalent to US$572 billion, with the debt-to-GDP ratio projected at 41.3%.

Among the maturing obligations are 154.5 trillion rupiah in government securities issued under a pandemic-era burden-sharing scheme between the finance ministry and Bank Indonesia. The maturity of those burden-sharing securities is projected to rise to 210.5 trillion rupiah in 2027.

Interest payments are projected to consume 599.44 trillion rupiah in 2026, equal to about 22.27% of total tax revenues. The International Monetary Fund recommends a safety threshold of 10% for interest payments as a share of tax revenues. Including principal repayments, over 45% of state revenues will be devoted to debt obligations in 2026.

The rupiah weakened to 17,400 per US dollar in May 2026, its lowest level on record. The yield spread between Indonesian government bonds and US Treasuries reached 250 basis points, and the government offered yields as high as 5.5% for long-tenor global bond issuances. Indonesia carries one of the highest sovereign yields in ASEAN, with nominal borrowing costs in 2026 around 6.6% against economic growth of 5.1% that year.

To finance the fiscal deficit, projected at 2.9% of GDP against a statutory ceiling of 3%, the government is absorbing liquidity from the banking sector. Foreign exchange reserves are being used to stabilize the rupiah and service external debt obligations, while Bank Indonesia is employing market-friendly monetary instruments to maintain stability. The primary balance is projected at a deficit of 0.6% of GDP.

The Prabowo administration has implemented expansive spending policies aimed at stimulating consumption, including the Free Nutritious Meals program, known as MBG, with projected allocations of 335 trillion rupiah. Portions of the education budget have been diverted to finance consumption-oriented programs. Indonesia's tax ratio fell to 8.42% in early 2025, against a government target of 13% by 2026.

The Daya Anagata Nusantara Investment Management Agency, known as Danantara, became operational in 2026 as a strategic sovereign investment vehicle. Plans call for channeling up to 500 trillion rupiah into downstream industrialization and infrastructure projects through the agency. The IMF warned against allowing Danantara to engage in quasi-fiscal activities that conceal debt outside the official balance sheet.