Indonesia’s external debts in April slow

Jakarta (Indonesia Window) – Indonesia’s external debts at the end of April 2021 were logged at 418.0 billion U.S. dollars or grew by 4.8 percent year-on-year (yoy), lower than 7.2 percent (yoy) in the previous period.

“Such development was driven by the decelerated growth of the government’s and the private’s external debts,” Head of Bank Indonesia’s Communication Department Erwin Haryono said in a written statement here Tuesday (June 15).

On an annual basis, the government’s external debt in April 2021 slowed to 8.6 percent (yoy) from 12.6 percent (yoy) in March 2021. It is in line with the net withdrawal of foreign loans, which is used to support program and project financing, including financial inclusion program, he explained.

In addition, the positive sentiment on maintained global market players’ confidence has encouraged foreign investors to return to their portfolio investments in the domestic government securities market, Erwin added.

According to him, the government’s external debt is managed in a prudent, credible, and accountable manner to support spending towards priority sectors, including to support the handling of the COVID-19 pandemic and the National Economic Recovery program.

Erwin pointed out that the government’s external debt in April 2021, which was registered at 209.0 billion U.S. dollars, remained safe and manageable since most of it consisted of long-term maturity debt, accounting for 99.9 percent of the total government’s external debt.

“The growth of private’s external debt in April 2021 was recorded at 1,2 percent (yoy), slowing from 2,6 percent (yoy) in the previous month,” he noted, adding that this development was driven by a deeper contraction of the financial corporation’s external debt at 8.6 percent (yoy) from 6.6 percent (yoy) contraction in the previous month.

In addition, the external debt of nonfinancial corporations also experienced moderation to 4.3 percent (yoy) from 5.3 percent (yoy) last month.

With those developments, the private’s external debt position in April 2021 was recorded at 209.0 billion U.S. dollars, dominated by long-term maturity external debt, which accounted for 78.4 percent of the total private’s external debt.

Reporting by Indonesia Window