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The position of external debt in Indonesia remained manageable in July 2023. External debt maintained a 0.9% (yoy) contraction to reach USD396.4 billion in July 2023 after retreating 1.5% (yoy) the month earlier. The contraction stemmed from private external debt. The position of external debt in July 2023 was also influenced by broad-based US Dollar depreciation against most global currencies.
Government external debt remains manageable. In July 2023, the position of government external debt stood at USD193.2 billion, with annual growth accelerating to 4.1% (yoy) from 2.8% (yoy) in the previous period. This was driven, among others, by foreign loans withdrawal to support program and project financing. The Government remains firmly committed to maintaining prudential, efficient and accountable external debt management, as well as preserving credibility in servicing principal and interest payments promptly. As a component of State Revenue and Expenditure Budget (APBN) financing instruments, external debt plays an important role in supporting government efforts to fund productive and priority sectors, thereby sustaining solid economic growth in Indonesia despite global economic uncertainty. External debt support encompasses human health and social activities (24.0% of total government external debt); public administration, defence and compulsory social security (18.1%); education (16.8%); construction (14.2%); as well as insurance and financial services (10.1%), amongst others. Furthermore, the current position of government external debt is considered safe and manageable, with 99.9% of total government external debt dominated by long-term maturities.
Private external debt maintained a contractionary trend. The position of private external debt tracked a slightly deeper 5.9% (yoy) contraction to USD193.9 billion in July 2023 after shrinking 5.8% (yoy) the month earlier. Such developments were underpinned by external debt at financial corporations, which recorded a deeper 10.5% (yoy) contraction compared with 9.1% (yoy) in the previous period. By sector, the main contributors to private external debt in the reporting period were the manufacturing industry; electricity, gas, steam and air conditioning supply; insurance and financial services; as well as mining and quarrying, accounting collectively for 78.1% of total private external debt. Furthermore, 75.6% of total private external debt was dominated by long-term tenors.
The structure of external debt in Indonesia remains sound, supported by prudential management. External debt was still manageable in July 2023, as reflected by a lower ratio of external debt to gross domestic product (GDP) of 29.2% in the reporting period compared with 29.3% the month earlier, and dominated by long-term debt that accounted for 87.8% of the total. Seeking to maintain a healthy structure, Bank Indonesia and the Government continued strengthening coordination in terms of monitoring external debt developments, supported by the application of prudential principles, while optimising the role of external debt to support development financing and promote sustainable national economic growth, as well as minimise the risks that could impact economic stability.
Further information and metadata are presented in the publication of Indonesia's External Debt Statistics (SULNI) September 2023 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.
Jakarta, 15th September 2023
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