From 2006 to 2015, Indonesia's foreign debt increased by 144 percent to US$310 billion, or an average of 9.9 percent per year. In the first six months of 2016, foreign debt also rose by 4.4 percent to US$323.8 billion, or approximately Rp 4,209.3 trillion at an exchange rate of Rp 13,000 per US dollar.
Indonesia's foreign debt showed an upward trend from 2006 until 2016. Loans taken by the government to finance development projects, as well as expansionary activities by the private sector, caused Indonesia's foreign debt to continuously accumulate.
This substantial debt must be managed effectively to prevent it from becoming a time bomb in the future. This is exemplified by the experiences of Greece and other European countries that faced crises due to debt defaults.
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