This paper examines the recent macroeconomic development in Indonesia, which is under the process of transition toward a new stage, and reviews Indonesia􀊟s Medium-term Development Plan (2004-2009) with its impact on the public debt sustainability. According to the estimates given in this paper, even if the fiscal deficit continues at just under 1% of GDP each year and a balanced budget will not be achieved by 2009, public debt will fall by about 20 percentage points of GDP by 2009. While fiscal financing will depend more on government securities than it did, government securities holders have been diversified to a certain degree. It is important to continue fostering the secondary market for government securities, and the government is expected to make further efforts to that end.