Wednesday, 17 July 2019 | 17:19 WIB

Q2 2018, External Debt Growth Slows Down


JAKARTA, NNC - Indonesia's external debt (ULN) in the second quarter (Q2) of 2018 has slowed down, which amounts to 5.5 percent year on year (yoy) to US$355.7 billion. Debt growth is lower than the previous quarter which reached 8.9 percent yoy.

Total debt in the second quarter of this year consists of government and central bank debt of US$179.7 billion, and private debt amounting to US$176.0 billion.

As explained by the Bank Indonesia Communications Department in an official statement on Monday (8/20/2018), government external debt grew slower in line with resilient fiscal management amid global pressure and financing strategies sought to further optimize sources of the domestic market.

The government's external debt position at the end of Q2 2018 fell compared to the external debt position at the end of Q1 2018, due to the net repayment of loans and domestic government securities (SBN) repurchased by domestic investors.

Meanwhile, the strengthening of the US dollar and trade tension between the US and China also affected the fluctuations in the domestic SBN market.

However, fiscal management by the government is able to reduce global pressure. In addition, the government is targeting the fulfillment of APBN financing to be sourced more from the domestic market.

With these developments, government external debt at the end of the second quarter 2018 grew only 6.1 percent (yoy), or lower than the first quarter of 2018 of 11.6 percent (yoy) to US$176.5 billion.

The government debt is divided into non-resident SBN (SUN and SBSN or State Sukuk) of US $ 122.3 billion and loans from foreign creditors of US $ 54.2 billion.

The structure of total external debt in Q2 2018 remains under control at a healthy level. This is reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP) at the end of Q2 2018 which is stable at around 34 percent. This ratio is still better than the peers' average.

Whereas, based on the timeframe, Indonesia's external debt structure at the end of the second quarter 2018 remains dominated by long-term external debt which has a 86.6 percent share of total external debt.