Indonesia’s External Debt Growth Slowed - Bank Sentral Republik Indonesia
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July 15, 2020

Indonesia's external debt experienced slower growth at the end of Q4/19. The external debt was recorded at USD404.3 billion, consisted of public debt (government and central bank) of USD202.9 billion, as well as private debt (including state-owned enterprises) of USD201.4 billion. Indonesia’s external debt decelerated to 7.7% (yoy) from 10.4% (yoy) in the previous quarter. Such conditions stemmed from government and private external debt, for which the growth moderated.

Government external debt growth slowed from the previous period. Government external debt in Q4/19 was recorded at USD199.9 billion, which growth declined from 10.3% (yoy) to 9.1% (yoy) in the previous quarter. The growth was supported by influx of foreign capital to domestic government securities market and issuance of dual currency global bonds, namely in euro and US dollar. Such conditions reflect solid investor confidence in the national economic outlook and attractive domestic financial markets, as well as less uncertainty in global financial markets. The management of government external debt is prioritized to finance economy, whereas the largest portion is directed towards productive sectors that could promoting economic growth and improving public welfare, among others, human health & social work activities sector (19.1% of government external debt), construction sector (16.6%), education sector (16.2%), public administration, defense & compulsory social security sector (15.4%), and financial & insurance sector (13.3%).

Downward trend in private external debt growth continued from the previous quarter. At the end of Q4/19, private external debt grew 6.5% (yoy), down from 10.8% (yoy) during the last quarter. The lower growth was led by financial institution external debt, which fell from 6.8% (yoy) to 2,9% (yoy), as well as nonfinancial institution external debt which dropped from 12,1% (yoy) to 7,6% (yoy). By sector, the debt was dominated by the financial & insurance sector, electricity, gas, & water supply sector, manufacturing sector, and mining & drilling sector, with share amounted to 76.9% to total private external debt.

Indonesia's external debt maintained a healthy structure supported by the prudential principle application in its management. The condition was among others, reflected in the indicator of Indonesia's external debt to Gross Domestic Product (GDP) ratio in 2019 at 36,1%, which was relatively stable compared to the last quarter. In addition, the debt structure remained dominated by long-term debt, accounted for 88.3% 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 without incurring 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) February 2020 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.

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