At the national aggregate level, the local government debt-to-GRDP ratio increased moderately from 0.35% in 2013 to 0.87% in 2023. Despite this upward trend, the level of local government indebtedness in Indonesia remains relatively low compared to the economic capacity of the regions. This condition is likely attributable to the characteristics of Indonesia’s fiscal decentralization system, which remains heavily dependent on intergovernmental transfers from the central government, thereby reducing the need for debt-financed expenditures. Further examination of the distribution reveals substantial heterogeneity across regions. The median value of only 0.17%, which is considerably lower than the mean, indicates a highly positively skewed distribution. This suggests that the increase in the national average is not driven by a broad-based rise in borrowing across all local governments but rather by a small number of jurisdictions with exceptionally high debt burdens, with the maximum ratio reaching 112.71%. Such extreme observations are consistent with the fiscal characteristics of several local governments in Eastern Indonesia, where relatively small economic bases result in disproportionately high debt-to-GRDP ratios. In these regions, even modest increases in borrowing can generate unusually large ratios when measured against the scale of local economic output.