Indonesia’s Foreign Debt Increase to Rp6,624 Trillion as of August 2024

Jakarta – Bank Indonesia (BI) noted that Indonesia’s external debt (ULN) has increased. Indonesia’s external debt position in August 2024 was recorded at USD425.1 billion or IDR6,624.33 trillion (assuming an exchange rate of IDR15,580/USD). This figure grew by 7.3 percent on an annual basis or year on year (yoy) compared to the previous month of USD414.3 billion.

Head of the BI Communication Department Ramdan Denny Prakoso said the development of foreign debt came from the public sector and the private sector.

“The external debt position in August 2024 was also influenced by the weakening of the US dollar against the majority of global currencies, including the rupiah,” Ramdan said in an official statement, Monday, October 14, 2024.

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Furthermore, the position of government external debt in August 2024 amounted to USD200.4 billion, or grew by 4.6 percent yoy, higher than the growth in July 2024 of 0.6 percent yoy.

The development of external debt was mainly influenced by an increase in foreign capital inflows on domestic Government Securities (SBN), in line with the continued investor confidence in Indonesia’s economic prospects.

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

Ramdan stated that government external debt continues to be managed carefully, credibly, and accountably to support spending, including in the health services and social activities sector at 20.9 percent of total government external debt, government administration, defense, and compulsory social security 18.9 percent, education services 16.8 percent, construction 13.6 percent, and financial and insurance services 9.3 percent.

In August 2024, the position of private external debt was recorded at USD197.8 billion, or grew by 1.3 percent yoy, slightly higher than the growth in July 2024 of 0.5 percent yoy.

“The development of external debt was mainly driven by the external debt of nonfinancial corporations, which recorded a growth of 1.6 percent yoy,” he added.

Indonesia’s external debt structure remains healthy, supported by the application of the prudential principle in its management. This is reflected in the ratio of Indonesia’s external debt to Gross Domestic Product (GDP) which is maintained at 31.0 percent, and is dominated by long-term external debt with a share of 84.3 percent of total external debt.

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In order to maintain a healthy external debt structure, BI and the government continue to strengthen coordination in monitoring external debt developments.

“The role of external debt will also continue to be optimized to support development financing and encourage sustainable national economic growth.These efforts are made by minimizing risks that can affect economic stability,” he explained. (*)