Indonesia's Foreign Debt Up To 8.8 Percent, Becoming of IDR 5,569 Trillion

TRIBUNBATAM.id - Bank Indonesia (BI) recorded, Indonesia's Foreign Debt (Utang Luar Negeri) in August 2019 amounted to 393.5 billion US dollars or the equivalent of approximately Rp.5,569 trillion (exchange rate of Rp.14,153).

The foreign debt consists of public foreign debt (government and central banks), amounting to 196.3 billion US dollars, and private foreign debt (including BUMN), amounting to 197.2 billion US dollars.

Indonesia's foreign debt grew 8.8 percent (yoy), slowing compared to the previous month's growth of 10.9 percent (year over year), mainly influenced by foreign debt payments. 

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"Foreign debt is growing slowly with a healthy structure," explained BI, as quoted from a written statement on Tuesday (10/15/2019). 

The slowdown in foreign debt growth was due to the declining position of public and private foreign debt compared to the previous month. 

For the government foreign debt, growth was also slowed compared to the previous month. Government foreign debt in August 2019, which is 8.6 percent (yoy) to 193.5 billion US dollars, slowed from July 2019 which grew 9.7 percent (yoy). 

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In addition to slowing down, the position of the government's foreign debt was also lower compared to the position in the previous month due to the reduced position of Government Securities held by foreign investors. 

"This is influenced by, among others, the uncertainty factor in the global financial markets in line with the continuing trade tension and increasing geopolitical risks," explained BI.

The management of government external debt is prioritized to finance development.

The biggest portion is in several productive sectors that support economic growth and increase community welfare, namely the health service sector and social activities (18.9 percent of total government external debt), the construction sector (16.4 percent), the education service sector (15.9 percent), the government administration, defense and mandatory social security sectors (15.2 percent), and the financial and insurance services sector (13.9 percent). 

Slowing growth was also occurs in private foreign debt. The position of private foreign debt at the end of August 2019 grew 9.3 percent (yoy), lower than the previous month's growth of 12.6 percent (yoy).

Repayment of corporate debt from non-financial institutions has pushed the position of private foreign debt by 2.6 billion US dollars to 197.2 billion US dollars. 

By sector, private foreign debt is dominated by the financial and insurance services sector, the manufacturing industry sector, the electricity, gas, steam / hot water and air supply sector, and the mining and quarrying sector. The share of foreign debt in the four sectors of the total private foreign debt reached 75.6 percent.

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BI explained, Indonesia's Foreign Debt structure remained healthy supported by the application of the precautionary principle in its management.

This condition was reflected in, among others, the ratio of Indonesia's Foreign Debt to Gross Domestic Product in August 2019, amounting to 36.1 percent, this condition improved compared to the ratio in the previous month.