Indonesia’s External Debt Rises to $427.5 Billion in January 2025

JAKARTA, investortrust.id – Indonesia’s external debt remained under control in January 2025, reaching $427.5 billion, a 5.1% year-on-year increase, according to Bank Indonesia (BI). This marks an acceleration from December 2024’s 4.2% annual growth. The increase was driven by public sector borrowings, including debt incurred by the government and the central bank.

"The external debt growth was influenced by the public sector, particularly government and central bank debt," said BI’s Executive Director of the Communications Department, Ramdan Denny Prakoso, on Monday, March 17, 2025.

BI reported that government external debt stood at $204.8 billion in January 2025, growing 5.3% year-on-year, up from 3.3% in the previous month. This increase was attributed to rising foreign capital inflows into international sovereign bonds, reflecting investors’ continued confidence in Indonesia’s economic outlook.

As a key financing tool for the state budget, Indonesia’s government debt is managed prudently and efficiently, with allocations focused on priority spending, Ramdan Denny explained. Government external debt is strategically directed to support key sectors, including healthcare and social services (22.6% of total government external debt), public administration, defense, and social security (17.8%), education services (16.6%), construction (12.1%), and financial services and insurance (8.2%).

"The government’s external debt remains under control, with nearly all borrowings having long-term maturities, accounting for 99.9% of total government debt," he added.

Meanwhile, private sector external debt in January 2025 stood at $194.4 billion, contracting 1.7% year-on-year, mirroring the decline in December 2024. The contraction was mainly driven by financial corporations, whose external debt fell by 2.3% year-on-year, deeper than the 1.0% contraction in the previous month.

By sector, private external debt was concentrated in manufacturing, financial services and insurance, electricity and gas supply, and mining and quarrying, collectively making up 79.4% of total private sector debt. Long-term borrowings continued to dominate, comprising 76.6% of total private external debt.

BI emphasized that Indonesia’s external debt structure remains sound, reflecting a prudent debt management approach. The external debt-to-GDP ratio decreased to 30.3% in January 2025 from 30.5% in December 2024. Additionally, long-term debt comprised 84.7% of total external debt, ensuring financial stability.