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Jakarta, August 19, 2026 – Indonesia’s external debt rose to US$453.4 billion in the second quarter of 2026, a 4.4 percent increase year on year, according to Bank Indonesia.
The rise was driven by government and central bank borrowing, while private sector liabilities continued to contract.
Despite the increase, the central bank emphasized that the debt structure remains “healthy,” supported by long term obligations and prudent management.
Government external debt reached US$216.3 billion, expanding by 2.9 percent, a slower pace compared to the 3.8 percent growth recorded in the first quarter.
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This increase was largely attributed to foreign capital inflows into government securities, reflecting sustained investor confidence in Indonesia’s fiscal management.
Meanwhile, the central bank’s debt rose as non resident investors increased their holdings of Bank Indonesia Rupiah Securities (SRBI), underscoring the appeal of domestic instruments amid global uncertainty.
In contrast, private sector external debt fell to US$194.6 billion, contracting by 0.6 percent.
Although still declining, the pace of contraction moderated compared to the 1.3 percent drop in the previous quarter.
The reduction was mainly concentrated in financial corporations, which continued to pare back their external obligations, albeit at a slower rate.
Bank Indonesia highlighted that the overall debt profile remains manageable.
The debt to GDP ratio stood at 30.6 percent, with 82.1 percent of obligations classified as long term, reducing refinancing risks and providing resilience against short term market volatility.
The central bank noted that external debt continues to be directed toward “productive sectors,” supporting infrastructure development and long-term economic growth.
Analysts caution that global financial conditions could pose challenges.
Rising interest rates in the United States and Europe may increase borrowing costs for emerging markets, while currency fluctuations could amplify repayment burdens.
For Indonesia, maintaining investor confidence will be critical, particularly as the government balances fiscal expansion with debt sustainability.
Still, the steady inflows into government bonds and central bank securities highlight Indonesia’s credibility in managing its external position.
The moderation in private sector deleveraging also suggests that corporate borrowing may stabilize, potentially signaling renewed investment appetite in the quarters ahead.
Indonesia’s external debt trajectory reflects a delicate balance: rising public obligations offset by cautious private sector behavior.
With long term debt dominating the structure, the country remains shielded from immediate refinancing pressures.
Yet the outlook will hinge on global interest rate trends, currency stability, and the government’s ability to sustain growth while keeping debt risks in check.
At present, Bank Indonesia’s reassurance of “healthy” debt management underscores confidence in the nation’s external position.
But as global financial conditions tighten, Indonesia’s resilience will be tested in how effectively it can navigate external pressures while sustaining domestic momentum.
