Indonesia’s External Debt May 2020 Remained Manageable - Bank Sentral Republik Indonesia
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August 14, 2020

Indonesia’s external debt has been managed with a healthy structure at the end of May 2020. The external debt was recorded at USD404.7 billion, consisted of public debt (Government and Central Bank) of USD194.9 billion, as well as private debt (including state-owned enterprises) of USD209.9 billion. Indonesia’s external debt grew 4.8% (yoy), higher than 2.9% (yoy), influenced by net drawing transactions from the Government as well as private external debt. In addition, the Rupiah appreciation against the US dollar also contributed to an increase in Rupiah-denominated external debt.

Government’s external debt increased compared to the previous month. The government’s external debt position was registered at USD192.1 billion, or grew by 3.1% (yoy) at the end of May 2020. The higher position was primarily influenced by capital inflow from the government securities (SBN) market in line with less global financial market uncertainty, coupled with highly attractive domestic financial assets and maintained foreign investor confidence in the national economic outlook. Such positive sentiments led to a lower yield of SBN hence reducing the cost of external debt. The management of government’s external debt is conducted in a prudent and accountable manner to support government spending towards priority sectors, which focus on COVID-19 handling and nurture national economic recovery. These priority sectors include human health & social work activities sector (23.4% of external debt), construction sector (16.4%), education sector (16.3%), financial & insurance sector (12.6%), and public administration, defense, & compulsory social security sector (11.6%).

Private’s external debt rose on the back of nonfinancial corporations’ debt. At the end of May 2020, private’s external debt accelerated to 6.6% (yoy) from 4.4% (yoy) in the previous month. Nonfinancial corporations’ external debt grew by 8.9% (yoy), amid a contraction of 0.8% (yoy) in financial corporations’ external debt. Several sectors with the largest share of external debt amounted to 77.3% of total private’s external debt, were the financial & insurance sector; mining & drilling sector; electricity, gas, steam & air conditioning supply sector; and manufacturing sector.

Indonesia's external debt maintained a healthy structure supported by the prudential principle application in its management. Indonesia's external debt to Gross Domestic Product (GDP) ratio in May 2020 at 36.6%, slightly increased from 36.2% in the previous month. Nevertheless, the debt structure remained dominated by long-term debt, accounted for 89.0% 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 solid external debt structure. Furthermore, external debt's role will also be optimized in supporting development financing by minimizing the risks which may affect macroeconomic stability.

The complete data on the latest Indonesia’s external debt and its metadata can be obtained in the publication of Indonesia's External Debt Statistics (SULNI) July 2020 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.

Head of Communication Department
Onny Widjanarko
Executive Director
 
Information about Bank Indonesia
Tel: 021-131, Email: bicara@bi.go.id

 

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