Indonesia's external debt position recorded a further decrease in the third quarter of 2022.  At the end of the reporting period, the position of external debt in Indonesia stood at USD394.6 billion, down from USD403.6 billion in the second quarter of 2022. The latest developments stemmed from lower debt positions recorded in the public sector (Government and Central Bank) and private sector.  Annually, the external debt position experienced a deeper 7.0% (yoy) contraction in the third quarter of 2022 after contracting 2.9% (yoy) in the previous quarter.

Government external debt maintained a downward trend in the third quarter of 2022.  The position of government external debt retreated to USD182.3 billion in the third quarter of 2022 from USD187.3 billion in the second quarter of 2022.  Annually, government external debt recorded a deeper 11.3% (yoy) contraction in the reporting period compared with an 8.6% (yoy) contraction in the second quarter of 2022.  The lower government external debt position was attributable to a rebalancing of domestic government securities (SBN) to other instruments, which reduced the portion of non-resident holdings of domestic SBN in response to increasing global financial market uncertainty.  The servicing of several maturing program and project loans also lowered the position of government external debt in the reporting period.  Meanwhile, external debt disbursements in the third quarter 2022 remained oriented towards supporting government priority expenditures, including Covid-19 handling and the national economic recovery program. The Government remains firmly committed to maintaining credibility by servicing principal and interest payments punctually, coupled with prudential, credible and accountable external debt management.  Government external debt support to fund priority expenditures in the reporting period targeted, amongst others, human health and social activities (24.6% of total government external debt), education (16.6%), public administration, defence and compulsory social security (15.2%), construction (14.2%) as well as insurance and financial services (11.6%).  The current position of government external debt is considered safe and manageable, with approximately 99.9% dominated by long-term maturities.

Private external debt also maintained a downward trend. The position of private external debt decreased to USD204.1 billion in the third quarter of 2022 from USD207.7 billion in the previous quarter.  Annually, private external debt experienced a deeper 2.6% (yoy) contraction in the reporting period after declining 0.1% (yoy) in the second quarter of 2022.  This was explained by 4.5% (yoy) and 2.1% (yoy) contractions in terms of external debt at financial corporations and non-financial corporations respectively, primarily due to a net payment on debt securities.  By sector, the main contributors to private external debt in the reporting period were insurance and financial services; mining and drilling; electricity, gas, steam and air conditioning supply; as well as the manufacturing industry, accounting collectively for 77.8% 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 2022, as reflected by a lower ratio of external debt to gross domestic product (GDP) from 31.8% in the second quarter of 2022 to 30.1% in the third quarter of 2022.  In addition, the sound structure of external debt in Indonesia is dominated by long-term debt, accounting for 87.4% of total external debt. Seeking to maintain a healthy structure, Bank Indonesia and the Government continued to strengthen 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 accelerate the national economic recovery, 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) November 2022​ edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.

Jakarta, 15 November 2022

Communication Department

Erwin Haryono

Executive Director