BI: Indonesia's External Debt Remains Under Control in February 2024

TEMPO.CO, Jakarta - Head of the Communication Department of Bank Indonesia (BI) Erwin Haryono said Indonesia's external debt (ULN) in February 2024 remained under control, Antara reported.

Indonesia's external debt in February 2024 was recorded at US$ 407.3 billion, or grew 1.4 percent year on year (yoy), an increase compared to the previous month's position which grew 0.2 percent (yoy).

"The increase mainly came from the public sector, both the government and the central bank. The development of the external debt position was also influenced by the weakening of the US dollar against several global currencies, including the rupiah," Erwin said in Jakarta on Friday.

Indonesia's external debt structure remains healthy, supported by prudential principles in its management. This is reflected in the ratio of Indonesia's external debt to gross domestic product (GDP) of 29.5 percent. Long-term external debt dominates, with an 86.9 percent share of total external debt.

To maintain a healthy external debt structure, Bank Indonesia and the government continue strengthening coordination in monitoring external debt developments, supported by applying the prudential principle in its management.

The role of external debt will also continue to be optimized in supporting development financing and encouraging sustainable national economic growth, by minimizing risks that can affect economic stability.

Furthermore, Erwin said that government external debt remains under control and is managed in a measured, efficient and accountable manner.

The government's external debt position in February 2024 was recorded at US$ 194.8 billion, or 1.3 percent (yoy), an increase compared to 0.1 percent (yoy) in the previous month.

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

External debt is one component of the State Budget (APBN) financing instrument. To continue economic growth, it supports government efforts in financing productive sectors and priority spending.

Government external debt continues to be managed prudently, credibly, and accountably to support spending, including in the health services and social activities sector (21.1 percent of total government external debt); government administration, defense, and mandatory social security (18.1 percent); education services (16.9 percent); construction (13.7 percent); and financial and insurance services (9.7 percent).

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 of 99.98 percent of total government external debt.

Private external debt continued to contract growth. The position of private external debt in February 2024 was recorded stable at around US$ 197.4 billion.

On an annual basis, private external debt contracted growth by 1.3 percent (yoy), continuing the contraction in the previous month of 2.3 percent (yoy).

The contraction in external debt growth came from financial institutions and non-financial institution companies, each by 1.3 percent (yoy).

Based on economic sector, the largest private external debt came from the manufacturing industry sector; financial services and insurance; electricity, gas, steam/hot water, and cold air procurement; and mining and quarrying, with a share of 78.3 percent of total private external debt.

Private external debt also remains dominated by long-term external debt with a share of 76.3 percent of total private external debt.

ANTARA

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