Indonesia's External Debt Reaches $435.6 Billion in May as Private Borrowing Contracts

---

JAKARTA, Investortrust.id – Indonesia’s external debt reached $435.6 billion in May 2025, growing 6.8% year-on-year, a slower pace than April’s 8.2%, according to Bank Indonesia (BI). The moderation was driven by a deceleration in public debt growth and a contraction in private sector borrowing.

Bank Indonesia’s Executive Director of the Communication Department, Ramdan Denny Prakoso, said the weakening momentum reflected the maturing of sovereign bonds and subdued loan expansion in the private sector.

Public external debt stood at $209.6 billion in May, growing 9.8% from a year earlier, down from 10.4% growth in April. The increase was primarily attributed to scheduled repayments of global bonds, while foreign capital inflows into domestic sovereign bonds remained steady amid continued investor confidence in Indonesia’s economic outlook.

“As an APBN financing instrument, external borrowing is directed toward priority programs to support stability and growth while maintaining debt sustainability,” Ramdan stated in a written statement on Monday, July 14, 2025.

The government allocated a large portion of its foreign loans to key sectors, including health and social services (22.3%), public administration and social security (18.7%), education (16.5%), construction (12%), and transport and logistics (8.7%).

Despite the uptick in public debt, BI emphasized that the risk profile remains low, with 99.9% of public external debt comprising long-term instruments.

Private Debt Sees Renewed Contraction

Private sector external debt totaled $196.4 billion in May, marking a 0.9% annual contraction—wider than April’s 0.4% decline. The shrinkage stemmed from both financial institutions and non-financial corporations.

Debt owed by financial institutions slowed to 1.2% growth in May, compared to 2.8% in April. Meanwhile, debt among non-financial corporations fell 1.4%, following a 1.2% contraction in the previous month.

The largest shares of private external debt came from the manufacturing industry, financial and insurance services, electricity and gas procurement, and the mining and quarrying sector. These four segments accounted for 80.2% of all private external debt.

“Long-term debt remains dominant, comprising 76.5% of private sector external obligations,” Ramdan added.

Bank Indonesia affirmed that the country’s external debt profile remains stable and sustainable. As of May 2025, the external debt-to-GDP ratio stood at 30.6%, with long-term debt making up 84.6% of total external liabilities.