Indonesia’s Foreign Debt Shrinks in Q2 2023, Mainly Due to Depreciation of Private External Debt

JAKARTA, KOMPAS.com – Bank Indonesia (BI) noted that Indonesia’s foreign debt (ULN) shrank again in the second quarter of 2023. This decrease mainly came from the depreciation of private external debt.

Head of the BI Communication Department Erwin Haryono said, the position of Indonesia’s foreign debt in the second quarter of 2023 was US$396.3 billion. This value is lower than the position of the first quarter of 2023 of US$403.2 billion.

“With these developments, Indonesia’s foreign debt on an annual basis experienced a growth contraction of 1.4 percent (yoy), continuing the contraction in the previous quarter of 1.9 percent (yoy),” he said, in his statement, Tuesday (15/8/2023 ).

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Erwin further explained, RI’s external debt consisted of government external debt of 192.5 billion US dollars and private external debt of 199.7 billion US dollars.

When viewed in more detail, the government’s foreign debt shrank compared to the first quarter of 194 billion US dollars. Even so, if we look at it on an annual basis, the government’s foreign debt has increased by 2.8 percent.

The decline in the government’s external debt position on a quarterly basis was due to net payments of foreign loans and global bonds that were due. On the other hand, portfolio investment placements in the domestic Government Securities (SBN) market increased.

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“As one of the components in the APBN financing instrument, the use of government external debt continues to be directed at supporting the government’s efforts to finance the productive sector and priority spending,” said Erwin.

The central bank assesses that the government’s foreign debt position is still maintained. This is reflected in the share of long-term external debt which reached 99.8 percent of the government’s total external debt.

Meanwhile, the position of private external debt in the second quarter of 2023 shrank from the previous quarter of 199.7 billion US dollars. On an annual basis, private external debt also shrank, namely by 5.6 percent.

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The position of private foreign debt is also considered to be maintained. It is recorded that private external debt is also dominated by long-term external debt with a share of 75.4 percent of total private external debt.

In view of these developments, Erwin said, Indonesia’s external debt in the second quarter of 2023 remained under control, reflected in the ratio of Indonesia’s external debt to Gross Domestic Product (GDP), which fell to 29.3 percent compared to the ratio in the previous quarter of 30.1 percent.

In addition, the structure of external debt is dominated by long-term external debt with a share of 87.7 percent of total external debt.

“The structure of Indonesia’s external debt remains healthy, supported by the application of the precautionary principle in its management,” he said.

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2023-08-15 04:30:00
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