Indonesia’s foreign debt in Q1 decreases

Jakarta (Indonesia Window) – Bank Indonesia (BI) has reported that Indonesia’s foreign debt at the end of the first quarter of 2022 was recorded at 411.5 billion U.S. dollars, down from the country’s external debt in the previous period of 415.7 billion dollars.

The condition was caused by a decrease in the foreign debt of the public sector (the government and the central bank) and the private sector, Head of the BI Communications Department Erwin Haryono said in an official statement on Thursday.

On an annual basis, the position of foreign debt in the first quarter of 2022 contracted by 1.1 percent (year-on-year/yoy), deeper than the decline in the previous period of 0.3 percent (yoy), Erwin noted.

The downward trend in the government foreign debt in the first quarter of 2022 continued, he said, adding that the position of the government’s foreign debt in the first quarter of 2022 was 196.2 billion dollars, down from the previous period of 200.2 billion dollars.

On an annual basis, the growth in the government foreign debt contracted by 3.4 percent (yoy), deeper than the decline in the previous quarter of 3.0 percent (yoy).

This decline occurred in line with several series of maturing government securities (SBN), both domestic and foreign currency bonds, as well as net repayments of loans maturing during the period of January to March 2022, most of which were bilateral loans.

In addition, the volatility in global financial markets that tends to be high also affects the shift of investment in domestic government securities to other instruments, thereby reducing the share of ownership by non-resident investors in domestic SBN.

The private foreign debt declined compared to the previous quarter. The position of private foreign debt in the first quarter of 2022 was recorded at 206.4 billion dollars, down from 206.5 billion dollars in the fourth quarter of 2021.

On an annual basis, the private external debt contracted 1.8 percent (yoy), deeper than the contraction in the previous quarter of 0.6 percent (yoy).

This condition was caused by the payment of foreign loans and bonds that matured during the first quarter of 2022, so that the external debt of financial corporations and non-financial corporations contracted by 5.1 percent (yoy) and 1,0 percent respectively (yoy).

The external debt remains dominated by long-term external debt with a share of 76.0 percent of the total private external debt. The structure of Indonesia’s external debt remains healthy, supported by the application of the principle of prudence in its management, Erwin explained.

Reporting by Indonesia Window