Indonesia’s External Debt Managed - Bank Sentral Republik Indonesia
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December 10, 2019
Indonesia's external debt was managed with a healthy structure at the end of Q2/2019. The external debt was recorded at USD391.8 billion at the end of Q2/2019, consisted of government and central bank debt of USD195.5 billion, as well as private debt (including state-owned enterprises) amounted to USD196.3 billion. Indonesia’s external debt grew 10.1% (yoy), higher than 8.1% (yoy) in the previous quarter, primarily due to a net withdrawal of external debt and the strengthening of rupiah against US dollar resulted in a more substantial amount of rupiah debt in terms of US dollar. The rising of total external debt mainly driven by government external debt, amid slower growth of private external debt.
 
The increasing growth of government external debt was in line with positive investors perception in the Indonesian economy. Government external debt in Q2/2019 stood at USD192.5 billion or grew 9.1% (yoy), higher than 3.6% (yoy) in the previous quarter. Investors confidence in the Indonesian economy climbed in line with the upgrading in Indonesia’s sovereign rating affirmed by Standard and Poor’s (S&P) at the end of May 2019, consequently induced net buying in the domestic and global government securities (SBN) by non-resident investors in Q2/2019. 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 (18.9% of government external debt), construction sector (16.4%), education sector (15.9%), public administration & defense sector (15.2%), and financial & insurance sector (14.0%).
 
Private external debt growth slowed. Private external debt outstanding at the end of Q2/2019 grew 11.4% (yoy), moderated from the previous quarter growth of 13.3% (yoy), mainly stemmed from an increase in corporate loan repayments. 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 76,9%.
 
Indonesia's external debt maintained a healthy structure. This condition was reflected in, among others, Indonesia's external debt to Gross Domestic Product (GDP) ratio at the end of Q2/2019 at 36.8%, improved from the previous quarter. In addition, Indonesia's external debt structure remained dominated by long-term debt, accounted for 87.0% 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 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) August 2019 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website. 
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