No. 25/307/DKom
The position of external debt in Indonesia declined in the third quarter of 2023 compared with the previous quarter. At the end of the third quarter of 2023, the position of external debt in Indonesia stood at USD393.7 billion, down from USD396.5 billion in the second quarter of 2023. The decline primarily stemmed from a lower public external debt position. Annually, therefore, the external debt position in Indonesia experienced a 0.1% (yoy) contraction to maintain the 1.2% (yoy) contraction recorded in the last quarter.
Government external debt declined from the previous period. At the end of the third quarter of 2023, government external debt was recorded at USD188.3 billion, retreating from USD192.5 billion in the previous quarter, or growing 3.3% (yoy) annually. The quarterly decline was influenced by a rebalancing of non-resident investor fund placements in the domestic SBN market to other instruments in response to rising global financial market volatility. In addition, the Government remains firmly committed to preserving credibility in servicing principal and interest payments promptly, as well as maintaining prudential, efficient and accountable external debt management. As a component of State Revenue and Expenditure Budget (APBN) financing instruments, external debt in the third quarter of 2023 remained focused on support to fund productive sectors and priority expenditures, particularly ongoing efforts to maintain solid economic growth in Indonesia amid elevated global economic uncertainty. External debt support encompasses human health and social activities (23.9% of total government external debt); public administration, defence and compulsory social security (18.3%); education (16.7%); construction (14.2%); as well as insurance and financial services (10.1%), among others. The current position of government external debt is considered safe and manageable, with nearly all, or 99.9% of total government external debt, dominated by long-term maturities.
Private external debt remains manageable and maintained a contractionary phase. The position of private external debt at the end of the third quarter of 2023 was recorded at USD196.0 billion, increasing from USD194.6 billion in the previous quarter. Annually, private external debt experienced a 3.8% (yoy) contraction to continue the 5.3% (yoy) contraction recorded in the second quarter of 2023. Such developments were underpinned by external debt at financial and non-financial corporations, which experienced respective contractions of 3.5% (yoy) and 3.9% (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 78.4% of total private external debt. Furthermore, 75.7% 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 third quarter of 2023, as reflected by a lower ratio of external debt to gross domestic product (GDP) of 28.9% from 29.3% in the previous quarter and dominated by long-term debt that accounted for 87.6% 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 management principles, while optimising the role of external debt to support development financing and promoting sustainable national economic growth, as well as minimising the risks that could impact economic stability.
Further information and metadata are presented in the publication of Indonesia's External Debt Statistics (SULNI) November 2023 edition on the Bank Indonesia website. This publication can also be accessed via the Ministry of Finance website.
Jakarta, 15th November 2023
Communication Department
Erwin Haryono
Executive Director
