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The position of external debt in Indonesia declined in the second quarter of 2023 compared with the previous quarter. At the end of the second quarter of 2023, the position of external debt in Indonesia stood at USD396.3 billion, down from USD403.2 billion in the first quarter of 2023. Annually, therefore, the external debt position in Indonesia experienced a 1.4% (yoy) contraction to maintain a 1.9% (yoy) contraction recorded in the last quarter. The contraction primarily stemmed from a lower private external debt position.
Government external debt declined from the previous quarter. At the end of the second quarter of 2023, government external debt was recorded at USD192.5 billion, down from USD194.0 billion in the first quarter of 2023, or growing 2.8% (yoy) annually. The quarterly decline was driven by a net payment on maturing government's foreign loans and global bonds. Meanwhile, portfolio investment placements in the domestic government securities (SBN) increased, given the maintained positive sentiment of global financial market players. 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 in the second quarter of 2023 remained focused on support to fund productive and priority sectors, particularly ongoing efforts to maintain solid economic growth in Indonesia amid global economic uncertainty. External debt support encompasses human health and social activities (24.1% of total government external debt); public administration, defence and compulsory social security (18.0%); education (16.8%); construction (14.2%); as well as insurance and financial services (10.1%), amongst others. The current position of government external debt is considered safe and manageable, with nearly all, or 99.8% of total government external debt, dominated by long-term maturities.
Private external debt also declined in comparison to the previous quarter. The position of private external debt retreated to USD194.4 billion at the end of the second quarter of 2023 from USD199.7 billion in the last quarter. Annually, private external debt experienced a deeper 5.6% (yoy) contraction compared with a 3.0% (yoy) contraction in the first quarter of 2023. Such developments were underpinned by external debt at financial and non-financial corporations, which experienced 7.4% (yoy) and 5.1% (yoy) contractions, respectively, compared with the last quarter contraction, which both recorded 3.0% (yoy). By sector, the main contributors to private external debt in the reporting period were the manufacturing industry; insurance and financial services; electricity, gas, steam and air conditioning supply; as well as mining and quarrying, accounting collectively for 78.2% of total private external debt. Furthermore, 75.4% 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 the second quarter of 2023, as reflected by a ratio of external debt to gross domestic product (GDP) of 29.3% in the reporting period, down from 30.1% one quarter earlier. In addition, the sound structure of external debt in Indonesia is dominated by long-term debt, accounting for 87.7% of total external debt. Seeking to maintain a healthy structure, Bank Indonesia and the Government continued strengthening coordination in terms of monitoring external debt, supported by the application of prudential principles, while optimising the role of external debt to support development financing and promoting sustainable 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) August 2023 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.
Jakarta, 15th August 2023
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