Public borrowing lifted annual debt growth in July, while private-sector liabilities declined and long-term maturities helped contain refinancing risk.
Indonesia’s external debt was broadly stable in July 2026, although its year-on-year expansion accelerated as government borrowing increased while private companies continued to reduce their overseas liabilities.
The country’s total external debt stood at $454.8 billion, compared with $454.5 billion in June, according to Bank Indonesia. On an annual basis, the debt stock grew 4.9%, driven mainly by the public sector.
Bank Indonesia is the country’s central bank and compiles the external-debt statistics in coordination with the Ministry of Finance. The figures include foreign-currency and rupiah-denominated obligations owed to non-residents by the government, central bank and private sector.
Key figures:
- Total external debt: $454.8 billion
- Month-earlier position: $454.5 billion
- Annual growth: 4.9%
- Government external debt: $218.4 billion, up 3.2%
- Private external debt: $194.5 billion, down 1.2%
- External debt-to-GDP ratio: 30.7%
Government external debt increased partly because of foreign investment in international sovereign securities, known in Indonesia as Surat Berharga Negara, or SBN. Bank Indonesia said those inflows reflected continued investor confidence in the country’s economic outlook.
External borrowing remains one of several instruments used to finance the state budget, or APBN. The largest sectoral allocations supported health and social services, which accounted for 22% of government external debt, followed by public administration, defence and compulsory social security at 20.7%. Education received 16.2%, construction 11.5%, and transportation and warehousing 8.5%.
Private-sector external debt moved in the opposite direction. Liabilities of non-financial corporations contracted 1.4% from a year earlier, while those of financial companies fell 0.3%. Manufacturing, financial services and insurance, electricity and gas, and mining collectively represented 80.6% of private external debt.
The decline may indicate more cautious corporate expansion, repayment of overseas obligations or greater reliance on domestic funding. For banks and companies, reduced foreign borrowing can limit exposure to exchange-rate swings, although it may also signal weaker demand for investment financing.
The overall structure remains an important buffer. Both government and private external debt are dominated by long-term maturities, reducing immediate refinancing pressure. Still, the headline debt-to-GDP ratio does not capture every risk. Currency composition, interest costs, export earnings and borrowers’ ability to generate foreign-exchange revenue also determine repayment capacity.
For policymakers, the task is to preserve market access while ensuring borrowed funds raise productive capacity. Investors, meanwhile, will watch whether public borrowing continues to increase as private debt contracts—and whether rupiah volatility or higher global rates make that financing more expensive.