Indonesia's Foreign Debt Decreases at the End of 2021

Indonesia's external debt (ULN) reached US$415.1 billion at the end of 2021.

According to Bank Indonesia (BI) records, this debt position decreased compared to the end of Q3 2021. Similarly, on a year-on-year (yoy) basis, the Q4 2021 ULN position decreased by 0.4% compared to Q4 2020.

BI stated that this decrease in ULN was due to a decline in both government and private sector ULN.

Government ULN US$200.2 Billion

Specifically, government ULN decreased from US$206.37 billion in Q4 2020 to US$200.2 billion in Q4 2021. Government ULN contracted by 3% (yoy) after experiencing 4.1% (yoy) growth in Q3 2021.

BI noted that the decrease in government ULN occurred due to several series of State Bonds (SBN) maturing, as well as the repayment of some principal loans in Q4 2021.

In addition, high volatility in the global financial market influenced the shift of investment from SBN to other instruments, thus reducing the ownership portion of non-resident investors in SBN.

Private Sector ULN US$205.87 Billion

Meanwhile, the private sector ULN position decreased year-on-year from US$207.69 billion in Q4 2020 to US$205.87 billion in Q4 2021.

Private debt contracted by 0.9% (yoy) after growing by 0.6% (yoy) from the previous quarter, in line with net payments of loans and other debts during Q4 2021.

According to BI, this development was caused by a deeper contraction of the ULN of financial institutions to 4.2% (yoy), from a contraction of 2.7% (yoy) in the previous quarter, and a contraction of the ULN of non-financial corporations to approximately 0.01% after growing by 1.5% (yoy) in Q3 2021.

Debt-to-GDP Ratio 35%

BI assessed that Indonesia's ULN structure in Q4 2021 remained healthy because its ratio to Gross Domestic Product (GDP) remained at around 35%, down from 37% in the previous quarter.

Furthermore, Indonesia's ULN structure is considered healthy because it is dominated by long-term ULN. Its share was recorded at 88.3% of the total ULN.

(See Also: [Indonesia Among Top 10 Lower-Middle-Income Countries with Largest External Debt](https://databoks.katadata.co.id/datapublish/2022/01/12/ri-masuk-daftar-10-negara-menengah-ke-bawah-dengan-utang-luar-negeri-terbesar))