​​Indonesia’s External Debt Growth Slowed - Bank Sentral Republik Indonesia
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November 14, 2018

Indonesia’s external debt growth at the end of Q2/2018 slowed. Indonesia’s external debt at the end of Q2/2018 amounted to USD355,7 billion, consisting of government and central bank external debt of USD179.7 billion, as well as private sector, including state-owned enterprises, external debt of USD176.0 billion. Indonesia’s external debt at the end of Q2/2018 grew at 5.5% (yoy), slower than previous month’s growth of 8.9% (yoy). The slowdown in external debt growth stemmed from slowing growth in both the government sector and private sector.

Indonesia’s external debt slowed in line with the resilient Government fiscal management amid global pressure and the financing strength to optimize sources of the domestic market. Government’s external debt at the end of Q2/2018 decreased from the preceding quarter level, due to the net repayment of loans and domestic government securities (SBN) that were bought back by domestic investors. The strengthening of the US dollar and trade tension between US and Tiongkok also influenced fluctuation in the domestic SBN markets. However, fiscal management by the Government is able to reduce global pressure. In addition, the Government targets the fulfillment of APBN financing to be sourced more from the domestic market. With this developments, government external debt at the end of Q2/2018 grew 6,1% (yoy), slower than the preceding quarter at 11,6% (yoy) to stand at USD176.5 billion, consisting of USD122.3 billion of government securities (SUN and SBSN/Sukuk) owned by non-residents and USD54.2 billion of foreign loans.

Private’s external debt growth slowed primarily due to the external debt of manufacturing sector and electricity, gas & water supply sector. The external debt growth of the manufacturing sector and electricity, gas & water supply sector at the end of Q2/2018 were recorded at 1.1% (yoy) nd 16.1% (yoy) respectively, lower than the growth in the preceding quarter. Meanwhile, the mining sector’s external debt growth increased and the financial sector’s external debt growth was relatively stable compared to the previous quarter. The shares of these four sectors’ external debt to total private sector external debt reached 72.2%, relatively unchanged from the previous quarter.

The structure of external debt at the end of Q2/2018 remains manageable with healthy level. This is among other reflected in the ratio of Indonesia’s external debt to Gross Domestic Product (GDP) that is stable at around 34% at the end of Q2/2018. The ratio is better than the average ratio of peer countries. Based on original maturity, the Indonesia’s external debt structure at the end of Q2/2018 was still dominated by long-term debt, accounted for 86.6% of total external debt. Bank Indonesia in close coordination with the Government continues to monitor the development of external debt to optimize the external debt’s role in supporting development financing without incurring the risks that may affect macroeconomic stability.

The complete data concerning the Indonesia’s external debt can be found in the latest External Debt Statistics of Indonesia in Bank Indonesia website. The publication can also be accessed through the Ministry of Finance website.

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