Indonesia's Net Investment Obligation in Q4 2021 Increased: Here's What Drove It

Based on a report by Bank Indonesia (BI), Indonesia's net international investment liabilities amounted to US$278.6 billion in Q4 2021. This figure increased by US$1.3 billion from the end of Q3 2021.

Indonesia's net investment liabilities at the end of December 2021 were equivalent to 23.5% of its Gross Domestic Product (GDP). This position decreased compared to the previous quarter, which reached 24.2% of GDP.

The increase in Indonesia's net investment liabilities was due to an increase in the position of foreign financial liabilities (FFL) and a decrease in the position of foreign financial assets (FFA).

Indonesia's FFL position increased slightly, in line with the inflow of foreign capital in the form of direct investment. It rose by 0.1% compared to Q3 2021, reaching US$709.6 billion at the end of Q4.

The largest increase in FFL came from direct investment liabilities, recorded at US$268.34 billion at the end of 2021. This amount grew by 2.6% compared to the previous quarter.

Meanwhile, the FFA position decreased in line with financing needs. At the end of last year, the FFA position slightly decreased by 0.2% compared to the previous quarter, reaching US$431 billion at the end of Q4.

The decrease in FFA occurred in other investment assets, amounting to US$156.72 billion. This figure decreased by 1% compared to Q3 2021.

Furthermore, compared year-on-year, Indonesia's net investment liabilities at the end of last year were lower than at the end of 2020, with a value of US$280 billion.