Indonesia's external debt position remained manageable in February 2022. Indonesia's external debt contracted by 1.5% (yoy), continuing the previous month's contraction of 1.6% (yoy). Such developments stemmed from the external debt contraction of the public sectors (Government and Central Bank) and private sectors. Thus, the position of external debt at the end of February 2022 stood at USD416.3 billion.

Government external debt was still under control in February 2022 given measured and prudential management. In February 2022, the Government external debt contraction narrowed to 3.9% (yoy) from 5.4% (yoy) recorded in the previous month. Consequently, the position of government external debt stood at USD201.1 billion in February 2022. The latest developments were caused by the net drawing of foreign loans used to support programs and projects loan, including support development financing and increasing infrastructure capacity as well as programs to increase competitiveness, industrial modernization, and trade acceleration from the International Bank for Reconstruction and Development (IBRD) and the Asian Development Bank (ADB). In addition, positive sentiment in the form of maintained global market confidence reassured foreign investors to place portfolio investment in domestic government securities (SBN).  External debt disbursement in February 2022 was focused on supporting the Government's priority expenditures, including Covid-19 containment measures and the national economic recovery program.  The Government remains firmly committed to maintaining credibility by punctually servicing principal and interest repayment obligations, while managing external debt prudently, credibly and accountable.  Among others, priority expenditures include human health and social activities (24.6% of total government external debt), education (16.5%), public administration, defence and compulsory social security (15.1%), construction (14.2%), as well as insurance and financial services (11.8%).  The position of government external debt is safe and manageable, considering that 99.8% is dominated by long-term maturities.

Private external debt experienced a deeper contraction compared with conditions one month earlier. The contraction of private external debt increased to 2.0% (yoy) from 0.8% (yoy) in the previous period as non-financial corporations reduced external debt by 1.5% (yoy) after expanding their position by 0.1% (yoy) in January 2022.  Meanwhile, the external debt of financial corporations declined by a shallower 4.0% (yoy) in the reporting period after retreating 4.3% (yoy) in January 2022. With such developments, the position of private external debt was recorded at USD206.3 billion in February 2022.  By sector, the main contributors to private external debt in the reporting period were insurance and financial services, electricity, gas, steam and air conditioning supply, the manufacturing industry as well as mining and drilling, dominating 77.0% of the total private external debt. Furthermore, 75.6% of total private external debt was dominated by long-term tenors.

The external debt structure in Indonesia remains sound, supported by prudential management.  External debt in Indonesia was manageable in February 2022, as reflected by the ratio of external debt to gross domestic product (GDP) which remained maintain at 34.2%, a slight increase compared to the ratio in the previous month of 34.0%. In addition, external debt in Indonesia is still dominated by long-term debt, accounting for 87.8% of the total external debt.  Seeking to maintain a sound structure, Bank Indonesia and the Government continue to strengthen coordination in terms of monitoring external debt, supported by the application of prudential principles, while optimising the role of debt to support development financing and drive 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) April 2022 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.

Jakarta, 14^th April 2022

Head of Communication Department

Erwin Haryono

Executive Director