Indonesia’s External Debt Growth Slowed - Bank Sentral Republik Indonesia
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December 13, 2019
Indonesia's external debt growth slowed down with a healthy structure at the end of August 2019. The external debt at the end of August 2019 was recorded at USD393.5 billion, consisted of public debt (government and central bank) of USD196.3 billion, as well as private debt (including state-owned enterprises) of USD197.2 billion. Indonesia’s external debt grew 8.8% (yoy), lower than 10.9% (yoy) posted in the previous month, predominantly influenced by net repayment of external debt. The slowdown of growth stemmed from declining public and private external debt.
 
Government external debt growth decelerated from the previous month’s growth. Government external debt recorded 8.6% (yoy) growth to reach USD193.5 billion, lower than 9.7% (yoy) growth in July 2019. The level went down from the last period prompted by the capital outflows in the Domestic Government Securities (SBN), in line with the ongoing trade tensions and escalated geopolitical risks hence amplified global financial market uncertainty. Government external debt management was prioritized to finance development, dominated in productive sectors to promote growth as well as improving public welfare, among others, human health & social work activities sector (18.9% of government external debt), construction sector (16.4%), education sector (15.9%), public administration, defense & compulsory social security sector (15.2%), and financial & insurance sector (13.9%).
 
Private external debt growth slowed. Private external debt outstanding at the end of August 2019 grew at a slower pace to 9.3% (yoy) from the previous month’s growth of 12.6% (yoy). The payment of non-financial corporations’ trade credit had narrowed down the external debt by USD2.6 billion to USD197.2 billion. Private external debt was dominated by the financial & insurance sector, manufacturing sector, electricity, gas, & water supply sector, and mining & drilling sector. External debt’s share in these four sectors to total private external debt reached 75,6%.
 
Indonesia's external debt maintained a healthy structure supported by the prudential principle application in its management. The condition was reflected in, among others, Indonesia's external debt to Gross Domestic Product (GDP) ratio at the end of August 2019 at 36.1%, down from the previous month. In addition, Indonesia's external debt structure remained dominated by long-term debt, accounted for 88.1% of the total external debt. Bank Indonesia, in close coordination with the Government, continues to monitor external debt by promoting the prudential principle application in its management to maintain a healthy external debt structure. Furthermore, external debt's role will also be optimized in supporting development financing without incurring the risks which may affect macroeconomic stability.
 
The complete data on the latest Indonesian external debt and its metadata can be obtained in the publication of Indonesia's External Debt Statistics (SULNI) October 2019 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website. 
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