Tassia Sipahutar, Jakarta – Indonesia posted slower growth in its total foreign debts – in both the public and private sectors – throughout 2013 as the country's economic growth decelerated.

According to Bank Indonesia's (BI) latest statistics, which was published on Thursday, the total amount of foreign debt rose 4.6 percent year-on-year to reach US$264.06 billion, whereas in 2012, foreign debt surged 12 percent.

Hendy Sulistiowati, the executive director of BI's statistics and monetary department, said that the result was in line with the slowdown in Indonesia's gross domestic product (GDP) growth. In 2013, GDP stood at 5.78 percent, while the previous year, the country managed to post domestic growth of 6.23 percent.

The statistics show that 53.2 percent of the total foreign debt was down to the private sector, which is composed of banks and non-banking institutions, and the remaining 46.8 percent was booked by the public sector, which consists of the government and BI.

"The economic slowdown caused the private sector to book $140.51 billion in foreign debt, rising only 11.3 percent, while in 2012, it posted a higher growth rate of 18.3 percent," she told reporters during a media briefing. The economic slowdown affected the public sector even more as its foreign debt dropped 2 percent to $123.55 billion.

In terms of business segments, finance-related services dominated the private sector's foreign debt as they accounted for 26.2 percent of the figure, followed by manufacturing with 20.4 percent, and mining and drilling with 18.3 percent.

"However, despite making up the biggest part, loan growth in finance-related services actually decelerated from the previous year," she said. "On the other hand, mining became the business segment that posted the highest growth."

The statistics also reveal that US dollar-denominated debts remain the most preferred loans in both private and public sectors. US dollar debts amounted to 70.5 percent of the country's total foreign debts.

With the latest foreign debt results, Indonesia's debt-to-GDP ratio stood at 30.2 percent by the end of December 2013, up from 28.7 percent recorded in 2012. "Even though the ratio increased, it is still at a safe level," Hendy said, adding that BI set the maximum debt-to-GDP ratio at 50 percent.

Contacted separately, Bank Negara Indonesia (BNI) economist Ryan Kiryanto said that the country still needed to obtain foreign loans to support the state budget. However, contrary to BI, he said that the maximum debt-to-GDP level must be set at the range of between 25 to 30 percent, which was safer and more rational.

Meanwhile, Bank Internasional Indonesia (BII) economist Juniman, who goes by a single name, said that the private sector's loans had begun to surpass those of the public sector since 2012.

"This is something that the government must pay close attention to in order to prevent defaults in the private sector," he said. "One strategy that the government can implement is to set a debt-to-equity ratio benchmark for each economic sector."