Indonesia’s External Debt Growth in Q2/20 Increased - Bank Sentral Republik Indonesia
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September 18, 2020

Indonesia's external debt experienced higher growth. The external debt was recorded at USD408.6 billion at Q2/20, consisted of public debt (Government and Central Bank) of USD199.3 billion, as well as private debt (including state-owned enterprises) of USD209.3 billion. Indonesia’s external debt grew 5,0% (yoy), higher than 0,6% (yoy), influenced by net drawing transactions from the Government and private external debt. In addition, the Rupiah appreciation against the US dollar also contributed to an increase in Rupiah-denominated external debt.

The government’s external debt increased compared to the previous quarter. The position of government’s external debt was registered at USD196.5 billion or grew by 2.1% (yoy), reversing a 3,6% (yoy) contraction in the previous quarter. The higher position was primarily due to global Sukuk issuance to fulfill government financing targets, including a series of Green Sukuk, supports climate change financing. In addition, foreign capital inflows to government securities (SBN) market were sufficiently high, indicating a positive perception of macroeconomic policy management in mitigating the COVID-19 pandemic impact, maintaining stability, and nurturing a national economic recovery. The management of government’s external debt is conducted in a prudent and accountable manner to support government spending towards priority sectors, among others, human health & social work activities sector (share 23.5% of external debt), construction sector (16.4%), education sector (16.3%), financial & insurance sector (12.4%), and public administration, defense, & compulsory social security sector (11.7%).

Private’s external debt growth accelerated from the last quarter. At the end of Q2/20, private’s external debt grew at 8,2% (yoy), higher than 4,7% (yoy) in the previous quarter. Such development was influenced by an increase of nonfinancial corporation external debt, amid a contraction of financial corporation external debt. In Q2/20, the external debt of nonfinancial corporations accelerated from 7,0% (yoy) in Q1/20 to 11,4% (yoy). Meanwhile, the financial corporations external debt contracted by 1,7% (yoy), down from 2,4% (yoy) contraction in Q1/20. Several sectors with the most significant external debt share amounted to 77.3% of total private external debt: the financial & insurance sector; electricity, gas, steam & air conditioning supply sector; mining & drilling 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 Q2/20 is 37.3%, increased from 34.5% in Q1/20. Nevertheless, the debt structure remained dominated by long-term debt, accounted for 89.0% of the total external debt. In close coordination with the government, Bank Indonesia 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 to support development financing by minimizing the risks that 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) August 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

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