Tuesday, 19 November 2019 | 15:12 WIB

MoF: Indonesian Debt is Healthy and Manageable

MoF: Indonesian Debt is Healthy and Manageable (special)

JAKARTA, NETRALNEWS.COM - Indonesia's foreign debt at the end of April 2019 was controlled by a healthy structure. Indonesia's external debt at the end of April 2019 was recorded at 389.3 billion US dollars, consisting of government and central bank debt of 189.7 billion US dollars, as well as private debt (including state-owned enterprises) amounting to 199.6 billion US dollars.

In the June 2019 edition of Indonesia's Foreign Debt Statistics published by the Ministry of Finance (Ministry of Finance) and Bank Indonesia (BI), it was mentioned, Indonesia's external debt grew 8.7% (yoy), higher than the growth in March 2019 of 7.9 % (yoy) because of the net debt withdrawal transaction and the effect of the strengthening of the Rupiah against the US dollar so that the debt in Rupiah is recorded higher in US dollar denomination.

"The increase in external debt growth mainly came from private sector external debt, amid a slowdown in the growth of government external debt," read the report.

The growth of government external debt, according to the report, tends to slow down. The position of government external debt in April 2019 was recorded at 186.7 billion US dollars or grew 3.4% (yoy), slowing compared to the previous month's growth of 3.6% (yoy).

These developments, according to reports published by the Ministry of Finance and Bank Indonesia, were influenced by the payment of US $ 0.6 billion in loans and a decrease of 0.4 billion US dollars in ownership of Government Securities (SBN) due to uncertainty in global financial markets. sourced from trade tensions.

According to the report, the management of government external debt is prioritized to finance development, with the largest portion of several productive sectors that can support economic growth and community welfare, namely the health services sector and social activities (18.8% of total government external debt), the construction sector (16 , 3%), education services sector (15.8%), government administration, defense, and compulsory social security (15.1%), and the financial and insurance services sector (14.4%).

Private Sector Debt Increases

Meanwhile, the growth of private external debt, according to the Ministry of Finance and Bank Indonesia report, has increased. The position of private external debt at the end of April 2019 grew by 14.5% (yoy), higher than the growth in the previous month of 13.0% (yoy).

"Private external debt is dominated by the financial and insurance services sector, manufacturing industry sector, electricity, gas, steam / hot water and water(LGA) procurement sector, as well as the mining and quarrying sector with a total share of 75.2% of total private external debt," said the report.

However, the Ministry of Finance and Bank Indonesia assessed that Indonesia's external debt structure remained healthy. This condition is reflected in, among others, the ratio of Indonesia's external debt to Gross Domestic Product (GDP) at the end of April 2019 of 36.5%, relatively stable compared to the ratio in the previous month.

In addition, the structure of Indonesia's external debt remained dominated by long-term external debt which had a share of 86.2% of total external debt.

With these developments, according to the Ministry of Finance and Bank Indonesia, even though Indonesia's external debt has increased, it is still under control with a structure that remains healthy.

"Bank Indonesia and the Government continue to coordinate to monitor the development of external debt and optimize its role in supporting development financing, by minimizing risks that can affect economic stability," the report said.