JAKARTA – Indonesia’s foreign debt ratio is expected to remain relatively stable in the second half of 2026, in the range of 30-31 percent of gross domestic product. However, attention is needed to shift from the size of debt to the maturity structure and foreign exchange needs.
Head of Economist PermataBank Josua Pardede estimates that the ratio of foreign debt or ULN at the end of the year is in the range of 30.5-31.0 percent of GDP.
“This position is still relatively under control because the second quarter ULN of US$ 453.4 billion indeed grew 4.4 percent year-on-year, but the overall structure is still dominated by long-term debt of 82.1 percent,” said Josua in Jakarta, quoted from Antara, Tuesday, September 14.
Private ULN is even still contracting 0.6 percent, with 75.7 percent of which is long-term.
According to Josua, pressure on the ULN ratio can come from the need for greater state budget financing and the increase in foreign ownership of domestic securities. However, this condition is expected to be offset by nominal economic growth and private ULN which has not grown aggressively.
He assessed that the government was also still prioritizing financing from within the country and in rupiah currency so that the foreign exchange risk did not increase as much as the gross financing needs.
Although the ULN ratio to GDP is relatively stable, Josua highlighted the short-term increase in the ULN ratio based on the remaining maturity to foreign exchange reserves.
The ratio rose from 55.57 percent in the second quarter of 2025 to 72.77 percent in the second quarter of 2026.
In the same period, the ULN due within one year increased from around US$84.8 billion to US$105.9 billion.
The increase mainly came from the public sector. Government and central bank liabilities rose from around $34.5 billion to $51.6 billion. Meanwhile, private ULN rose more limited from around $50.3 billion to $54.4 billion.
Josua said the increase in the central bank was mainly related to the increase in foreign investor ownership of Bank Indonesia Rupiah Securities or SRBI.
Therefore, the risks that need to be monitored are not only the principal payment in US dollars, but the potential for foreign funds to exit and the conversion of rupiah into foreign currencies in a short time.
“The figure of 72.77 percent in the second quarter of 2026 should not be interpreted immediately as if it were all dollar debt that must be paid using foreign exchange reserves,” he said.
According to Josua, the focus of policy needs to be directed at managing foreign exchange liquidity, maturity profiles, and hedging discipline in the private sector.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language.
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