Despite Slowing Growth, Indonesia's Foreign Debt Approaches The Level Of IDR 6,000 Trillion

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) recorded Indonesia's foreign debt (ULN) in April 2021 amounting to 418 billion US dollars or equivalent to Rp. 5,961.5 trillion (exchange rate of Rp. 14,262).

The external debt position grew 4.8 percent year-on-year (yoy) and was slower than March 2021 growth of 7.2 percent yoy.

Head of the BI Communications Department Erwin Haryono said the development was driven by a slowdown in the growth of the position of government external debt and private external debt.

"The government's foreign debt in the April period this year grew lower than the previous month," he said in an official statement as quoted on Wednesday, June 16.

Erwin added that on an annual basis the government's external debt grew slower to 8.6 percent yoy from the previous 12.6 percent in March 2021.

"The government grew in April 2021 in line with the net withdrawal of foreign loans used to support financing programs and projects, including the financial inclusion program," said Erwin.

In addition, the positive sentiment of global market players that is maintained has encouraged foreign investors to return to their portfolio investments in the domestic Government Securities (SBN) market.

"The government's external debt remains managed in a prudent, credible and accountable manner to support priority spending, including efforts to deal with the COVID-19 pandemic and the National Economic Recovery (PEN) program," he stressed.

BI claims that the government's external debt in the April 2021 period was recorded at 206.0 billion US dollars, which is considered relatively safe and under control considering that almost all of them are long-term external debt with a share of 99.9 percent.

Meanwhile, private external debt grew at a slower pace compared to the previous month which was recorded at 1.2 percent yoy from the previous 2.6 percent in March 2021.

"With these developments, the position of private external debt in April 2021 was recorded at 209.0 billion US dollars and was dominated by long-term external debt with a share of 78.4 percent of the total," Erwin continued.

By sector, the largest private external debt comes from the financial and insurance services sector, the electricity, gas, mining and quarrying sector, and the manufacturing sector.

In terms of ratio, Indonesia's external debt in April 2021 was under control at 37.9 percent of gross domestic product (GDP) compared to March 2021 which was 39.1 percent of GDP.

"In order to maintain a healthy external debt structure, Bank Indonesia and the government will continue to strengthen coordination in monitoring, supported by the application of prudential principles in its management," concluded Erwin.