Indonesia's Foreign Debt Increases at the End of 2023, Reaching 407.1 Billion US Dollars

JAKARTA - Bank Indonesia (BI) noted that Indonesia's Foreign Debt (ULN) position in the fourth quarter of 2023 was recorded at 407.1 billion US dollars, or grew 2.7 percent (yoy), an increase compared to the previous quarter's position which grew 0.02 percent (yoy).

Executive Director, Head of the BI Communications Department, Erwin Haryono, revealed that the increase mainly came from public sector external debt transactions.

"Apart from that, the increase in the external debt position in the fourth quarter of 2023 was also influenced by the weakening of the US dollar against the majority of global currencies, including the Rupiah," he explained in his statement, Monday, February 15.

Erwin said that the government's external debt remains under control and is managed in a measurable and accountable manner. The government's external debt position at the end of the fourth quarter of 2023 was 196.6 billion US dollars or grew 5.4 percent (yoy), an increase from growth of 3.3 percent (yoy) in the previous quarter.

The development of external debt was mainly due to the withdrawal of foreign loans, especially multilateral loans, to support the financing of several programs and projects.

According to Erwin, the increase in government external debt was also influenced by an increase in portfolio investment placements in the domestic and international Government Securities (SBN) market, in line with positive sentiment regarding market players' confidence in line with global financial market uncertainty starting to ease.

Meanwhile, the government is committed to maintaining credibility by fulfilling obligations to pay principal and interest on debt on time, as well as managing external debt carefully, efficiently and accountably.

The position of government external debt is relatively safe and under control considering that almost all external debt has long-term tenors with a share reaching 99.8 percent of the total government external debt.

Apart from that, private external debt remains under control and continues to contract growth. The position of private external debt at the end of the fourth quarter of 2023 was recorded at 197.0 billion US dollars, or experiencing a growth contraction of 1.9 percent (yoy), continuing the contraction in the third quarter of 2023 of 3.5 percent (yoy).

Apart from that, the contraction in external debt growth came from financial institutions (financial corporations) and non-financial corporations, which experienced contractions of 2.4 percent (yoy) and 1.8 percent (yoy), respectively.

Indonesia's external debt structure remains healthy, supported by the application of the precautionary principle in its management. This is reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP) of 29.7 percent, and is dominated by long-term external debt with a share of 86.6 percent of the total external debt.