ASEAN KEY DESTINATIONS
Public, private sector foreign debt growth slows in July
Indonesia: The country saw 3.7 percent year-on-year (yoy) growth in foreign borrowing in July, lower than the growth in June at 6.3 percent owing to the sluggish economy, according to Bank Indonesia’s (BI) latest data.
The central bank recorded total foreign debts in July of US$303.7 billion, consisting of public and private borrowings, which stood at $134.5 billion and $169.2 billion, respectively.
“The slower growth of foreign borrowings in July occurred in both the public and private sector, which respectively accounted for 44.3 percent and 55.7 percent of the total amount,” BI’s director of statistics, Hendy Sulistyowati, said on Friday.
The BI data said foreign borrowings from the public sector had increased 0.3 percent yoy in July, compared to 2.2 percent yoy in the previous month.
Hendy said the public sector had seen a decline in foreign loan agreements, but foreign ownership of sovereign debt papers continued to increase following the country’s issuance of euro bonds worth $1.3 billion (¤1.25 billion) in late July.
Meanwhile, private sector foreign borrowings grew 6.7 percent yoy in July, lower than 9.7 percent yoy in the previous month, mainly on account of the decline of trade-related debts.
Despite the lower growth, the portion of foreign debts from non-affiliated companies in the private sector increased slightly to 65.6 percent, or worth $99 billion in July, from 64.5 percent or $98.5 billion in June.
According to the data, private sector foreign borrowings in July were concentrated more in the finance, manufacturing, mining, electricity, gas and water sectors, which constituted 76.1 percent of the total amount.
Hendy said foreign debts from the finance, manufacturing, electricity, gas and water sectors grew slower compared to the previous month.
“On the other hand, annual growth of foreign debts from the mining sector remained contracted, even though it was better than in the previous month,” she added.
As for the tenure, Hendy said Indonesia’s foreign borrowings were dominated by long-term debts worth $258.6 billion, which accounted for 85.2 percent of the total amount.
The long-term borrowings grew 5.5 percent yoy in July, compared to 8.1 percent yoy in the previous month, Hendy added.
Hendy said the long-term debts were dominated by the public sector, which amounted to $131.6 billion, or equal to 50.9 percent, while the private sector accounted for 49.1 percent or $127 billion.
On the other hand, the country’s short-term foreign borrowings constituted $42.2 billion to the private sector and $2.9 billion the public. Both accounted for 93.6 percent and 6.4 percent of total short-term foreign debts.
The short-term borrowings fell deeper to minus 5.4 percent yoy in July, lower than minus 2.9 percent yoy in June, the data said.
Economic growth slid in the second quarter to 4.67 percent yoy — a level unseen since 2009 — from 4.72 percent in the previous quarter.
Despite relatively healthy growth, Hendy said the central bank would continue to closely monitor foreign debts as they could carry risks to the economy.
“The close monitoring is meant to make sure foreign debts play an optimum role in financing the country’s development without creating risks that can affect macroeconomic stability,” Hendy said.
The public sector saw a decline in foreign loan agreements, but foreign ownership of sovereign debt papers continued to increase following the country’s issuance of euro bonds worth $1.3 billion (¤1.25 billion) in late July.
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