Jakarta. Bank Indonesia (BI) reported a decrease in Indonesia's foreign debt (ULN) in the first quarter of 2024 to $403.9 billion, down from $408.5 billion in the fourth quarter of 2023.

"The decline in ULN originates from both public and private sector debts. With this, Indonesia's ULN experienced an annual growth contraction of 0.02 percent, following a 3 percent (year-on-year) growth in the previous quarter," said BI spokesperson Erwin Haryono on Wednesday.

In Q1 2024, the government' 's foreign debt was $192.2 billion, down from $196.6 billion in the previous quarter. Annually, government's foreign debt contracted by 0.9 percent  (year-on-year), compared to a 5.4 percent  (year-on-year) growth in the previous quarter.

The decline in government ULN is mainly due to the outflow of non-resident investor funds in domestic government bonds to other investment instruments amid increasing global financial market uncertainty. The government is committed to maintaining credibility by meeting debt obligations on time and managing ULN flexibly to obtain optimal financing.

ULN continues to support productive sector financing and government priority spending, primarily in health and social activities (21.1 percent of total government ULN), government administration, defense, and social security (18.3 percent), education (16.9 percent), construction (13.7 percent), and financial and insurance services (9.6 percent).

"Government ULN is relatively safe, with almost all ULN having a long-term tenor, accounting for 99.98% of the total government ULN," Erwin explained.

Private ULN also decreased to $197 billion in Q1 2024, down from $198.4 billion in the previous quarter, with an annual growth contraction of 1.8 percent (year-on-year).

The contraction in ULN growth originated from non-financial corporations and financial corporations, each experiencing contractions of 1.8 percent  (year-on-year) and 1.6 percent  (year-on-year) respectively. The largest private ULN comes from the manufacturing industry, financial and insurance services, electricity, gas, steam/air conditioning supply, and mining and quarrying, accounting for 78.3% of total private ULN.

"Private ULN is still dominated by long-term ULN, accounting for 76.1 percent of total private ULN," Erwin clarified.

Indonesia's ULN structure remains healthy, with ULN to GDP ratio decreasing to 29.3 percent from 29.8 percent in the previous quarter, and dominated by long-term ULN, accounting for 86.8 percent of total ULN.

"Bank Indonesia and the Government continue to strengthen coordination in monitoring ULN developments and apply prudential principles in its management. ULN will continue to support development financing and sustainable national economic growth while minimizing risks affecting economic stability," Erwin concluded.

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