GOVERNMENT DEBT MANAGEMENT RISK MITIGATION STRATEGY IN MAINTAINING FISCAL SUSTAINABILITY IN THE ERA OF NATIONAL ECONOMIC RECOVERY
Sri Murwani (a*) Eri Hariyanto (b)

a. Politeknik Keuangan Negara STAN, Jalan Bintaro Utama Sektor V, Tangerang Selatan, 15222 Indonesia
*srimurwani[at]pknstan.ac.id

b. Pusdiklat Keuangan Umum, Pancoran, Jakarta Selatan, Indonesia

Abstract

The Covid-19 pandemic has caused drastic changes in the economic life of almost all nations in the world. Indonesia responded to the pandemic with various policies, including adjustments in fiscal policy. The sharp increase in the APBN deficit as a result of the economic slowdown and the Government^s efforts to overcome the pandemic has created various risks in debt management.

Through this research, the authors examine the financing risk portfolio during the economic recovery period, efforts to mitigate the Government^s debt risk during the economic recovery period and formulate alternative strategies related to financing risk management during the national economic recovery period. The study used descriptive qualitative analysis.

The results of the study show that the increase in financing needs during the Covid-19 pandemic for the 2020-2021 period has led to the emergence of several debt risks. These risks include: interest rate risk, exchange rate risk, lack of financing risk, and refinancing risk.

Issuing domestic debt, especially the issuance of SBN, can be one of the efforts to mitigate debt interest rates and the fluctuating Rupiah exchange rate. To mitigate the risk of financing shortages, the Government is still continuing the burden sharing program with Bank Indonesia. Mitigation of refinancing risk can be carried out with a policy of regulating the maturity structure of Government debt so that it does not accumulate in certain years.

To reduce financing pressure in the future, three strategies are offered, namely fiscal reform to improve the quality of the APBN so that it can become a driver of economic growth, development of non-debt financing sources, for example: PPP, SWF and SMV, and deepening of the domestic financial market.

Keywords: Government Debt, Fiscal Sustainability, National Economic Recovery

Topic: Economics