The position of external debt in Indonesia declined in October 2023 compared with the previous period. In October 2023, the position of external debt in Indonesia stood at USD392.2 billion, down from USD394.4 billion recorded in September 2023. The public sector predominantly contributed to the lower external debt position. Annually, therefore, the external debt position in Indonesia grew 0.6% (yoy) in the reporting period.
Government external debt declined from the previous period. In October 2023, government external debt was recorded at USD185.1 billion, down from USD188.3 billion in the previous period, with annual growth moderating to 3.0% (yoy) from 3.3% (yoy) one month earlier. This was primarily influenced by a rebalancing of non-resident investor funds in the domestic government securities (SBN) market to other instruments in response to increasing global financial market volatility. In addition, the Government remains firmly committed to preserving credibility in servicing principal and interest payments promptly, as well as maintaining prudential, efficient and accountable external debt management. The external debt in October 2023 remained focused to support priority expenditures and social protection programs, thereby sustaining solid economic growth in Indonesia against a backdrop of elevating global economic uncertainty. External debt support encompasses human health and social activities (23.8% of total government external debt); public administration, defence and compulsory social security (18.4%); education (16.7%); construction (14.2%); as well as insurance and financial services (10.0%), amongst others. The current position of government external debt is relatively safe and manageable, with 99.9% of total government external debt, dominated by long-term maturities.
Private external debt remained manageable and continued tracking a contractionary trend in the reporting period. The position of private external debt increased slightly to USD196.9 billion in October 2023 from USD196.7 billion the month earlier. Annually, private external debt recorded a 2.5% (yoy) contraction to continue a 3.5% (yoy) contraction the month earlier. The external debt contraction stemmed from external debt at financial corporations and non-financial corporations, which experienced 2.4% (yoy) and 2.5% (yoy) contractions respectively. By sector, the main contributors to private external debt in the reporting period were the manufacturing industry; insurance and financial services; electricity, gas, steam and air conditioning supply; as well as mining and quarrying, accounting collectively for 78.6% of total private external debt. Furthermore, 74.6% of total private external debt was dominated by long-term tenors.
The structure of external debt in Indonesia remains sound, supported by prudential management. External debt was still manageable in October 2023, as reflected by a lower ratio of external debt to gross domestic product (GDP) of 28.7% from 28.9% one month earlier, dominated by long-term debt that accounted for 86.8% of total external debt. Seeking to maintain a healthy structure, Bank Indonesia and the Government continued strengthening coordination in terms of monitoring external debt, supported by the application of prudential principles, while optimising the role of external debt to support development financing and foster sustainable economic growth, as well as minimise the risks that could impact economic stability.
The latest external debt data and metadata are presented in the publication of Indonesia’s External Debt Statistics (SULNI) December 2023 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.
Anang Fadhilah
