However, on an annual basis, Indonesia's external debt in May, 2021 swelled 3.1 percent, which was lower than the growth of 4.9 percent recorded in the previous month, it added.
"Indonesia's external debt structure in May, 2021 remained under control, as reflected in the ratio of Indonesia's external debt to gross domestic product (GDP), which was maintained at around 37.6 percent, a decrease compared to the ratio in the previous month of 37.9 percent," BI's communication department head, Erwin Haryono, informed in a statement released in Jakarta on Friday.
Indonesia's external debt structure remains healthy and is supported by the application of prudential principles, as demonstrated by the dominance of long-term debt, which accounts for 88.5 percent of the total foreign debt, he said. .
To maintain a healthy external debt structure, the central bank and the government will continue to strengthen coordination in monitoring its development, supported by the application of prudential principles in its management, he added.
The role of external debt will also continue to be optimized in supporting development financing and encouraging the National Economic Recovery (PEN) program by minimizing risks that can affect economic stability, Haryono said.
Related news: Indonesia's foreign debt swells 4% to $422.6 bln in Feb
The position of the government's external debt in May, 2021 was recorded at US$203.4 billion, down 1.3 percent compared to April, 2021, he informed.
"The position prompted a slowdown in the government's annual external debt growth to 5.9 percent in May, 2021 compared to 8.6 percent in April, 2021. The decline in the government's external debt position was in line with the falling payments of government securities (SBN) and loan in foreign currency, which was due in May, 2021," he said.
The government is committed to maintaining credibility by fulfilling debt obligations in a timely manner, as well as managing external debt in a prudent, credible, and accountable manner, so that the withdrawal of government external debt in May, 2021 will continue to be prioritized to support priority spending, including efforts to handle COVID-19 and the national economic recovery (PEN) program, Haryono said.
Expenditure will focus on the government administration, defense, and compulsory social security sector (17.8 percent of the total government external debt), the health services and social activities sector (17.2 percent), the education services sector (16.3 percent), the construction sector (15.4 percent), and the financial services and insurance sector (12.6 percent), he added.
"The position of the government's external debt is relatively safe and under control considering that almost all of it is long-term external debt, with a share of 99.99 percent of the government's total external debt," Haryono remarked.
Related news: Indonesia's foreign debt recorded at US$415.6 billion in Q1: BI
Related news: Indonesia's foreign debt recorded at US$417.5 billion in Q4 2020