Bank Indonesia

11/16/2020 | Press release | Distributed by Public on 11/15/2020 21:17

Indonesia’s External Debt Growth in Q3/20 Slowed

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Indonesia's External Debt Growth in Q3/20 Slowed
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​Communication Department
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Indonesia's external debt experienced lower growth. The external debt was recorded at USD408.5 billion at the end of Q3/20, consisting of public debt (Government and Central Bank) of USD200.2 billion and private debt (including state-owned enterprises) of USD208.4 billion. Indonesia's external debt at the end of Q3/20 grew by 3.8% (yoy), lower compared with 5.1% (yoy) in the previous quarter, mainly stemming from the payment of private sector external debt.

The government's external debt growth slowed compared to the previous quarter. At the end of Q3/20, the government's external debt was registered at USD197.4 billion or grew by 1.6% (yoy), declining from 2,1% (yoy) in Q2/20. Such development was in line with a rebalancing portfolio in the government securities (SBN) market by foreign investors in response to elevated global financial market uncertainty. Nevertheless, the government issued Samurai Bonds in Japan's financial market and withdrawn a partial loan commitment from the multilateral agency in Q3/20 as part of its strategy maintaining the portfolio's funding for handling COVID-19 pandemic and support the National Economic Recovery Program, hence moderated the growth. The management of government's external debt is conducted in a prudent and accountable manner to support government spending towards priority sectors, among others, human health & social work activities sector (share 23.7% of external debt), construction sector (16.6%), education sector (16.5%), public administration, defense, & compulsory social security sector (11.8%), and financial & insurance sector (11.5%).

Private's external debt growth also decelerated from the last quarter. At the end of Q3/20, the private sector's external debt grew by 6.0% (yoy), down from 8.4% (yoy) in the previous quarter. Such development was influenced by a slowed growth of nonfinancial corporation external debt coupled with the continued contraction of financial corporation external debt. The growth of nonfinancial corporation external debt decelerated from 11.6% (yoy) in Q2/20 to 8.1% (yoy) in Q3/20. Meanwhile, the financial corporation external debt recorded a slighter 1.0% (yoy) contraction compared with 1.8% (yoy) in the previous quarter. Several sectors with the most significant external debt share amounted to 77.4% of total private external debt, including the financial & insurance sector; electricity, gas, steam & air conditioning supply sector; mining & drilling sector; and manufacturing sector.

Indonesia's external debt maintained a healthy structure supported by the prudential principle application in its management. Indonesia's external debt to Gross Domestic Product (GDP) ratio in Q3/2020 is 38.1%, slightly increased from 37.4% in the last quarter. Meanwhile, the resilient structure of Indonesia's external debt was reflected from the large share of long-term debt, which accounted for 89.1% of the 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. Furthermore, 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.

The complete data on the latest Indonesia's external debt and its metadata can be obtained in the publication of Indonesia's External Debt Statistics (SULNI) November 2020 edition on the Bank Indonesia website. This publication can also be accessed through the Ministry of Finance website.

Head of Communication Department
Onny Widjanarko
Executive Director
Information on Bank Indonesia
Tel. 021-131, email: [email protected]