Jakarta: Indonesia’s external debt was recorded at USD408.5 billion at the end of the third quarter of 2020 (Q3/20), consisting of public debt (Government and Central Bank) of USD200.2 billion and private debt (including state-owned enterprises) of USD208.4 billion.
"Indonesia’s external debt at the end of Q3/20 grew by 3.8% (yoy), lower compared with 5.1% (yoy) in the previous quarter, mainly stemming from the payment of private sector external debt," Bank Indonesia (BI) Communication Department Head Onny Widjanarko said in a media release on Monday.
At the end of Q3/20, the government’s external debt was registered at USD197.4 billion or grew by 1.6% (yoy), declining from 2,1% (yoy) in Q2/20.
Such development was in line with a rebalancing portfolio in the government securities (SBN) market by foreign investors in response to elevated global financial market uncertainty.
"Nevertheless, the government issued Samurai Bonds in Japan’s financial market and withdrawn a partial loan commitment from the multilateral agency in Q3/20 as part of its strategy maintaining the portfolio’s funding for handling covid-19 pandemic and support the National Economic Recovery Program, hence moderated the growth," the BI official stated.
At the end of Q3/20, the private sector’s external debt grew by 6.0% (yoy), down from 8.4% (yoy) in the previous quarter.
Such development was influenced by a slowed growth of nonfinancial corporation external debt coupled with the continued contraction of financial corporation external debt.
The growth of nonfinancial corporation external debt decelerated from 11.6% (yoy) in Q2/20 to 8.1% (yoy) in Q3/20.
Meanwhile, the financial corporation external debt recorded a slighter 1.0% (yoy) contraction compared with 1.8% (yoy) in the previous quarter.
"Several sectors with the most significant external debt share amounted to 77.4% of total private external debt, including the financial & insurance sector; electricity, gas, steam & air conditioning supply sector; mining & drilling sector; and manufacturing sector," he stated.
Indonesia's external debt to Gross Domestic Product (GDP) ratio in Q3/2020 is 38.1%, slightly increased from 37.4% in the last quarter.
Meanwhile, the resilient structure of Indonesia’s external debt was reflected from the large share of long-term debt, which accounted for 89.1% of the total external debt.
In close coordination with the government, the central bank monitors external debt by promoting the prudential principle application in its management to maintain a solid external debt structure.
Furthermore, external debt’s role will also be optimized to support development financing and stimulate economic recovery by minimizing the risks that may affect macroeconomic stability.