Indonesia's foreign debt swells 4% to $422.6 bln in Feb

Indonesia's foreign debt swells 4% to $422.6 bln in Feb

An officer loads currency onto a truck at the BI Office in East Java on April 4, 2021. (ANTARA/Didik Suhartono/aww)

The debt growth was fueled by the government’s and private institutions’ foreign debts.
Jakarta (ANTARA) - Indonesia’s foreign debt reached US$422.6 billion in February, an increase of 4 percent year-on-year (yoy), Bank Indonesia (BI) reported.

In comparison, the nation’s foreign debt showed a growth of 2.7 percent yoy the previous month, the central bank said.

“The debt growth was fueled by the government’s and private institutions’ foreign debts,” chief of BI’s communication department, Erwin Haryono, said here on Friday.

The government’s foreign debt grew 4.6 percent (yoy) in February this year against 2.8 percent (yoy) in January on the back of efforts to handle the impact of the COVID-19 pandemic in 2020 and accelerate the national vaccination program and social protection in the first quarter of 2021, he explained.

The foreign debt rose to meet the financing target set in the 2021 State Budget, met through domestic and foreign funding by prioritizing medium- and long-term debt and active debt portfolio management to control costs and risks, he said.

The debt was also used to support the priority budget in the government administrative, defense, and compulsory social security sector (which accounted for 17.7 percent of the total funding), the health service and social activity sector (17.2 percent), the educational service sector (6.3 percent), the construction sector (15.3 percent), and the financial service and insurance sector (12.7 percent), Haryono informed.

“The government’s foreign debts stood at US$209.2 billion in February, 2020, lower than US$210.8 billion the previous month,” he said.

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Private institutions’ foreign debts, which were dominated by long-term debts, swelled 3.4 percent in February this year compared to 2.5 percent in January, Haryono disclosed.

The increase was fueled by non-financial institution companies’ foreign debt, which grew 5.9 percent in February against 5.1 percent in January due to the issuance of corporate global bonds in the mining sector, among other things, he said.

However, financial institutions’ foreign debt fell 4.9 percent in February, 2021 compared to 6.1 percent in January.

Nearly 77.3 percent of the private institutions’ foreign debt was contributed by the financial service and insurance, electricity, gas, steam/hot water and cold air, mining and excavation, and manufacturing sectors.

As of February, 2021, the private institutions’ foreign debt stood at US$210.5 billion, of which, 78 percent constituted long-term debt, Haryono said.

Overall, the country’s foreign debt structure remains healthy, supported by the principles of prudence, he observed.

The ratio of the country’s foreign debt to the national gross domestic product (GDP) remained manageable at 39.7 percent in February this year compared to 39.6 percent the previous month, he added. (INE)

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