RI's Foreign Debt July 2024 Increases 4.1 Percent To 414.3 Billion US Dollars, This Is The Trigger

JAKARTA - Bank Indonesia (BI) recorded Indonesia's Foreign Debt (ULN) in July 2024 of US$414.3 billion, or grew by 4.1 percent on an annual basis or year on year (yoy).

Assistant Governor of the BI Communication Department Erwin Haryono said that the development of the external debt came from the public sector, both the Government and the Central Bank.

"The position of external debt in July 2024 is also influenced by the factor of weakening the US dollar currency against the majority of global currencies, including the Rupiah," he explained in his official statement, Thursday, September 19.

Erwin said that the government's external debt in July 2024 was 194.3 billion US dollars, or grew by 0.6 percent (yoy), after recording a growth contraction of 0.8 percent (yoy) in June 2024.

According to Erwin, the development of external debt was influenced by the withdrawal of foreign loans and the increase in foreign capital inflows in Government Securities (SBN), along with maintained investor confidence in the prospects for the Indonesian economy.

"As one of the state budget financing instruments, the utilization of external debt continues to be directed to support the financing of the productive sector and priority spending to continue the momentum of economic growth," he explained.

Meanwhile, Erwin conveyed that private external debt in July 2024 was US$195.2 billion, or experienced a contraction in growth of 0.1 percent (yoy), after recording low growth in June 2024.

"This development was mainly driven by external debt companies instead of financial institutions (non-financial corporates) which recorded a growth contraction of 0.04 percent (yoy)," he said.

Erwin said the structure of Indonesia's external debt remains healthy, supported by the application of prudential principles in its management.

This is reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP) which is maintained at 30.2 percent, and dominated by long-term external debt with a share of 84.9 percent of total external debt.

"In order to keep the external debt structure healthy, Bank Indonesia and the Government continue to strengthen coordination in monitoring the development of external debt," he said.

Erwin said that the role of external debt will also continue to be optimized to support development financing and encourage sustainable national economic growth.

"This effort is carried out by minimizing risks that can affect economic stability," he concluded.