Indonesia's ratio of external debt to Gross Domestic Product (GDP) has shown an upward trend since 2012. The faster increase in external debt compared to GDP has led to a continuous rise in this ratio until the first half of 2016.
In June 2016, Indonesia's external debt-to-GDP ratio rose to 36.77 percent from 36 percent at the end of 2015. Total external debt in the second quarter of 2016 reached US$323.8 billion, while Indonesia's GDP was US$880.5 billion. The increasing external debt ratio needs to be monitored carefully to avoid risks to economic stability. This is particularly true for the private sector, where debt is continuously increasing, making it vulnerable to defaults if the Rupiah exchange rate fluctuates.
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