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Indonesia's foreign debt continues on a downward path

Jakarta Globe - August 15, 2023

Jauhari Mahardhika, Jakarta – Indonesia's foreign debt registered at $396.3 billion during the second quarter of the year, marking a marginal decrease from $403.2 billion in the preceding quarter, according to data released by the central bank on Tuesday.

Comparing the external debt position of the second quarter to the same period of the previous year, it reveals a decline of 1.4 percent, further continuing a downward trajectory following a 1.9 percent year-on-year decrease seen in the first quarter.

The government's foreign debt totaled $192.5 billion, a reduction from $194 billion recorded in the first quarter of 2023. However, the current debt position reflects a 2.8 percent increase in comparison to the previous year.

"The consistent decrease in the government's quarterly debt figures is attributed to scheduled debt payments and global bond issues," Bank Indonesia spokesman Erwin Haryono said in a statement.

He further highlighted that the government's external debt is earmarked to finance programs within productive sectors and prioritize expenditures aimed at bolstering economic growth.

Among the sectors benefiting from government foreign debt, healthcare emerged as the foremost recipient, accounting for 24.1 percent, trailed by defense spending (18 percent), education (16.8 percent), construction (14.2 percent), and financial services and insurance (10.1 percent).

In the same period, external debt procured by the private sector also exhibited a decline, contracting to $194.4 billion in the second quarter of 2023 from $199.7 billion in the previous quarter.

Source: https://jakartaglobe.id/business/indonesias-foreign-debt-continues-on-a-downward-pat