Indonesia’s External Debt Down to $415.1 Billion

Jakarta: Indonesia’s external debt decreased in the fourth quarter of 2021, according to Bank Indonesia (BI).
 
The external debt at the end of Q4/2021 was down to USD415.1 billion from USD424.0 billion in the previous quarter. 
 
Such development was driven by the declining position of the public sector (Government and Central Bank) and private sector external debt. Annually, Indonesia’s external debt contracted to 0.4% (yoy) after growing 3.8% (yoy) in the previous quarter.

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“The Government’s external debt in Q4/2021 declined compared with the previous quarter,” BI Communication Department Head Erwin Haryono said in a press release on Tuesday.
 
The position of Government’s external debt in Q4/2021 reduced to USD200.2 billion from USD205.5 billion in the previous quarter, thus contracted 3.0% (yoy) after expanding 4.1% (yoy) in Q3/2021. 
 
The decline in external debt was in line with the maturity of several series of government securities (SBN) and payments on maturing loans principal in Q4/2021.
 
In addition, the increasing volatility of global financial markets has affected the investment movement from SBN to other instruments, resulting in a declining share of non-resident investors in SBN. 
 
In terms of refinancing risk, the Government’s external debt position in Q4/2021 remained safe and manageable, which dominantly consists of long-term maturity debt, accounting for 99.9% of the Government’s external debt.
 
“The private’s external debt decreased compared with the previous quarter,” he said.
 
The private’s external debt position was down to USD205.9 billion in Q4/2021 from USD209.3 billion in Q3/2021. 
 
Annually, the private’s external debt experienced a 0.9% (yoy) contraction after growing 0.6% (yoy) in the previous quarter, which was in line with the net repayment loans and other debts during Q4/2021. 
 
This development was attributable to a deeper 4.2% (yoy) contraction of financial corporations from 2.7% (yoy) contraction in the previous quarter,  as well as the contraction of non-financial corporations at around 0,01% after expanding 1.5% (yoy) in Q3/2021.  
 
The private’s external debt was still dominated by long-term maturity external debt, accounting for 76.4% share of total private’s external debt.

Structure of Indonesia’s External Debt

“The structure of Indonesia’s external debt remained healthy, supported by the prudential principle application in its management,” he said.
 
Indonesia’s external debt in Q4/2021 is manageable, as reflected in the maintained ratio of Indonesia’s external debt to Gross Domestic Product (GDP) at around 35.0%, lower than 37.0% in the previous quarter. 
 
In addition, the structure of Indonesia’s external debt remained healthy, which was indicated by the domination of long-term maturity debt with an 88.3% share of total external debt.  
 
“In close coordination with the government, Bank Indonesia monitors external debt by promoting the prudential principle application in its management to maintain a solid external debt structure. External debt’s role will also be optimized to support development financing and stimulate economic recovery by minimizing the risks that may affect macroeconomic stability,” he concluded.

 

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