Arnoldus Kristianus, Jakarta – Indonesia's external debt rose to $430.4 billion in the first quarter of 2025, marking a 6.4 percent year-on-year increase, according to Bank Indonesia. The growth outpaced the previous quarter's 4.3 percent expansion and was largely attributed to a surge in public sector borrowing.
Despite the uptick, Bank Indonesia said that the country's debt profile remains healthy, supported by prudent fiscal management.
"The structure of Indonesia's external debt remains sound, backed by a cautious debt management strategy," said Ramdan Denny Prakoso, Head of Bank Indonesia's Communication Department, in a statement on Thursday.
The external debt-to-GDP ratio stood at a safe level of 30.6 percent, with long-term debt accounting for 84.7 percent of the total.
To maintain debt sustainability, Bank Indonesia and the government continue to strengthen coordination in monitoring foreign debt developments.
"We will continue to optimize the role of external debt in financing development programs and promoting sustainable economic growth, while minimizing potential risks to macroeconomic stability," Ramdan added.
Government debt climbs on stronger investor confidence
Government debt reached $206.9 billion in Q1, rising 7.6 percent year-on-year – significantly higher than the 3.3 percent growth recorded in Q4 2024. The increase was fueled by new loan disbursements and robust foreign capital inflows into international government bonds (SBN), driven by sustained investor confidence in Indonesia's economic outlook despite global market volatility.
Government external debt was largely allocated to priority sectors, including:
- Health and social services (22.4%)
- Public administration, defense, and mandatory social security (18.5%)
- Education (16.5%)
- Construction (12.0%)
- Transportation and warehousing (8.7%)
Nearly all of this debt (99.9 percent) is long-term in nature, ensuring more stable repayment obligations.
Private sector debt contracts slightly
Private external debt stood at $195.5 billion, contracting 1.2 percent year-on-year. This marked a slight change compared to a 1.6 percent decline in the previous quarter.
The largest portions of private debt came from manufacturing, financial and insurance services, electricity and gas supply, and mining and quarrying. Together, these sectors made up 79.6 percent of total private external debt.