Is Indonesia's Foreign Debt Safe?

Indonesia's foreign debt at the end of 2017 reached US$352.47 billion, equivalent to Rp4,772.24 trillion at an exchange rate of Rp13,548 per US dollar. This figure represents an approximate 10% increase compared to the previous year. Despite this increase, the ratio to Gross Domestic Product (GDP) remained around 34%, significantly lower than the 46% ratio recorded in 2005. Therefore, Indonesia's debt remains relatively manageable and below the foreign debt ratios of several developed countries and other ASEAN member states. Nevertheless, Indonesia's debt ratio showed an upward trend from 2012 to 2015, followed by a slight decrease in 2016.

According to data from TradingEconomics, Indonesia's debt ratio is relatively lower than that of other countries, such as Japan (250.4% of GDP), the US (105%), Singapore (112%), Malaysia (53%), and Thailand (41%). At the end of last year, Indonesia's foreign debt ratio to exports stood at 167.73%. Furthermore, the ratio of short-term foreign debt based on the original maturity was 42.06% of foreign exchange reserves.

(Read Databoks: [Indonesia Emergency Debt?](https://databoks.katadata.co.id/datapublish/2017/07/28/indonesia-darurat-utang))

It is crucial that debt utilization is targeted towards development projects that can stimulate economic growth. Furthermore, meticulous calculations are necessary to prevent it from becoming a time bomb in the future. For reference, Indonesia's GDP at the end of last year was Rp13,589 trillion, equivalent to US$1 trillion. Export value reached US$168.73 billion, and foreign exchange reserves amounted to US$130.2 billion.