Jakarta: Indonesia's external debt at the end of Q2/2021 was recorded at USD415.1 billion, which fell 0.1% (qtq) compare to USD415.3 billion in Q1/2021.
On an annual basis, external debt decelerated from 7.2% (yoy) in the previous quarter to 1.9% (yoy) in Q2/2021.
"The lower growth was driven by slower growth of the Government's external debt and contraction of private's external debt," Bank Indonesia (BI) Communication Department Head Erwin Haryono in a press release on Monday.
"The Government's external debt recorded a lower growth compared to the previous quarter," he stated.
In Q2/2021, the Government's external debt amounted to USD205.0 billion, which grew lower at 4.3% (yoy) than 12,6% (yoy) in Q1/2021, stemming from a decline in the position of the foreign loans in line with the payment of maturing loans during the second quarter of 2021.
Repayment of foreign loans became an important part of maintaining the Government's credibility in managing external debt. Meanwhile, net foreign capital inflows into the domestic Government Securities (SBN) market increased from the previous quarter due to improving investor confidence, supporting liquidity in the domestic SBN market.
This positive trend also supports the Government in managing the financing carefully and measurably, whereas financing currently contributes a relatively significant role in handling the Covid-19 pandemic and the National Economic Recovery (PEN) program.
The position of Government's external debt in Q2/2021 remains safe and manageable considering that almost all of the external debt has a long-term maturity with a share of 99.9% of the total Government's external debt.
"The private's external debt declined from the previous quarter," he stated.
In Q2/2021, private's external debt contracted 0.5% (yoy) after recorded a positive growth of 2.6% (yoy) in Q1/2021.
Such development was caused by a deeper contraction of financial institutions' external debt growth to 6.8% (yoy) from 6.7% (yoy) in the previous quarter.
Besides, non-financial institutions' external debt growth slowed to 1.3% (yoy) from 5.4% (yoy) in Q1/2021.
With these developments, the private's external debt position in Q2/2021 registered at USD207.2 billion, fell 0.8% (qtq) from the previous quarter's position.
Several sectors with the most significant external debt, namely the financial & insurance sector; electricity, gas, steam & air conditioning supply sector; mining & drilling sector; and manufacturing sector, were accounted for 76.3% of total private external debt.
The private's external debt was still dominated by long-term maturity external debt, which accounted for 76.7% share of total private's external debt.
"The structure of Indonesia's external debt remained healthy, supported by the prudential principle application in its management," he stated.
Indonesia's external debt in Q2/2021 is manageable, as reflected in the maintained ratio of Indonesia's external debt to Gross Domestic Product (GDP) at 37.5%, lower than 39.0% in the previous quarter.
In addition, Indonesia's external debt structure remained healthy, indicated by the domination of long-term maturity debt with an 88.4% share of total external debt.
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