Third quarter 2018, Indonesia's external debt slowly increases by 4.2%

JAKARTA, KOMPAS.com – The Bank of Indonesia said that Indonesia's external debt had risen slowly by the end of the third quarter of 2018. Its growth was 4.2% (YoY), which slowed compared with the growth of 5.7% recorded in the previous quarter.

Until the end of the third quarter, Indonesia's external debt amounted to 359.8 billion US dollars. This amount includes $ 179.2 billion of public debt and central banks, as well as private debts, including state-owned enterprises, amounting to $ 180.6 billion. In BI's press release, it was stated that the slowdown in external debt growth was due to slowing growth in public external debt, in a context of growing private external debt.

We know that the government's external debt has increased by 2.2%. Its growth was slow compared to the previous quarter of 6.1%. The position of the state's external debt at the end of the third quarter of 2018 amounted to 176.1 billion US dollars.

In addition to slowing growth, the government's external debt position was also lower than the end of the second quarter of 2018 due to the worsening position of government securities held by foreign investors.

"This is also influenced by the situation of the national SBN market, which is affected by great global uncertainty," said a BI press release released on Friday (11/16/2018).

While for private external debt in the third quarter of 2018, there was an increase. The position of private external debt at the end of the third quarter of 2018 increased by 6.7% (year-on-year). The number increased compared to the previous quarter, which had increased by 5.8% (year-on-year).

Private external debt mainly belongs to the financial services and insurance sector, the manufacturing sector, the electricity, gas, steam / hot water and extractive industries sectors. The share of external debt in the four sectors relative to private external debt totaled 72.7%, a slight increase over the previous quarter.

BI said that, up to now, the evolution of Indonesia's external debt remained under control with a sound structure. This is reflected, among other things, in Indonesia's external debt-to-gross domestic product (GDP) ratio at the end of the third quarter of 2018, which was stable at around 34%.

The ratio is always better than the average of the peer countries. In addition, Indonesia's external debt structure remained dominated by long-term external debt, which accounted for 86.8% of total external debt.

"The Bank of Indonesia and the Government continue to coordinate to monitor the evolution of external debt and optimize its role in supporting development finance, without creating any risk that could affect economic stability ", says the press release.