Indonesia’s External Debt Growth Decelerated - Bank Sentral Republik Indonesia
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December 13, 2019
Indonesia's external debt experienced slower growth with a healthy structure as of end-May 2019. Indonesia's external debt at the end of May 2019 was recorded at USD386.1 billion, consisted of government and central bank debt of USD189.3 billion, as well as private debt (including state-owned enterprises) amounted to USD196.9 billion. Indonesia’s external debt grew by 7.4% (yoy), slowing compared to the previous month’s growth of 8.8% (yoy), primarily due to net repayments external debt and weakening of the rupiah against US dollar resulted in a less significant amount of rupiah debt in terms of US dollar. The slowdown of total external debt growth originated from private external debt, amid a remained low growth in government external debt. 
 
Government external debt growth remained low. The outstanding of government external debt at the end of May 2019 was USD186.3 billion, recorded an increasing growth of 3.9% (yoy) compared to 3.4% (yoy) in the previous month boosted by global bonds issuance. Despite the higher growth, the debt level went down from USD186.7 billion at the end of April 2019. The drop was induced by a USD0.5 billion fall from net repayments debt coupled with a USD1.5 billion reduction of foreign ownership in the Domestic Government Securities (SBN), triggered by more uncertainties in the global financial markets as trade tensioned escalated. Government external debt management is 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 (18.8% of government external debt), construction sector (16.4%), education sector (15.8%), public administration & defense sector (15.1%), and financial & insurance sector (14.3%).
 
Private external debt growth slowed. Private external debt outstanding at the end of May 2019 grew 11.3% (yoy), down from the previous month growth of 14.7% (yoy), mainly on account of declining debt in the financial and insurance sector. At the end of the reporting period, private external debt was dominated by the financial & insurance sector, manufacturing sector, electricity, gas, & water supply sector, and mining & drilling sector, with the share to total private external debt reached 75.2%.
 
Indonesia's external debt maintained a healthy structure. This condition was reflected in, among others, Indonesia's external debt ratio to Gross Domestic Product (GDP) as of end-May 2019 that relatively stable at 36.1%, compared with conditions in the previous period. In addition, Indonesia's external debt structure remained dominated by long-term debt, accounted for 87.3% of the total external debt. In order to maintain a healthy external debt structure, Bank Indonesia, in close coordination with the government, continues to monitor external debt by promoting the prudential principle application in its management. Furthermore, external debt's role will 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) July 2019 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website. 
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