Indonesia's Foreign Debt Reached Rp 8,000 Trillion in May 2026

JAKARTA, KOMPAS – Indonesia's external debt increased by 2.1 percent year-on-year in May 2026 to Rp 8,026.75 trillion. This development is influenced by public debt, both from the government and the central bank, amid a decline in private debt. Bank Indonesia (BI) reported on Wednesday (15/7/2026) that Indonesia's External Debt (ULN) position in May 2026 was recorded at 444.4 billion US dollars or Rp 8,026.75 trillion (equivalent to an exchange rate of Rp 18,000 per US dollar). This represents a 2.1 percent year-on-year increase, higher than the previous month's increase of 2 percent. This development is influenced by the government's debt position, which increased by 3.7 percent year-on-year, from IDR 3,785 trillion in May 2025 to IDR 3,924 trillion in May 2026. Almost all of this debt is long-term debt or has a maturity of more than one year. The Head of the Communication Department of BI, Ramdan Denny Prakoso, explained that the development of the government's external debt is primarily influenced by the inflow of international Government Securities (SBN). This also reflects the maintained confidence of investors in the prospects of the Indonesian economy. "The government remains committed to maintaining credibility by fulfilling the obligations of timely principal and interest payments on debt, as well as managing external debt prudently, measurably, and flexibly to achieve efficient and optimal financing," he stated in a press release. External debt, as one of the components in the financing instrument of the State Revenue and Expenditure Budget (APBN), will continue to be directed to support financing in the productive sector while maintaining sustainable debt management. Based on the sector, government external debt is utilized, among others, to support the Health Services and Social Activities Sector (22 percent of the total government external debt); Government Administration, Defense, and Mandatory Social Security (20.6 percent); Educational Services (16.2 percent); Construction (11.5 percent); as well as Transportation and Warehousing (8.5 percent). On the other hand, the central bank's foreign liabilities increased by 5.43 percent year-on-year, from IDR 533 trillion in May 2025 to IDR 562 trillion in May 2026. This was influenced by the increase in foreign ownership of Bank Indonesia's Rupiah Securities instruments, in line with monetary operations and efforts to maintain the stability of the rupiah exchange rate. In order to maintain a healthy external debt structure, Bank Indonesia and the Government continue to strengthen coordination in monitoring external debt developments. Meanwhile, the position of private external debt in May 2026 was recorded at IDR 3,540 trillion, a decrease of 0.1 percent year-on-year, lower than the previous month's decline of 0.5 percent. Private external debt is dominated by long-term loans, accounting for 74.9 percent of the total private external debt. This development was primarily driven by the external debt of financial corporations, which recorded an annual decline of 0.8 percent, lower than the 5 percent decline in April 2026. Based on the economic sector, the largest private external debt comes from the Processing Industry; Financial and Insurance Services; Electricity and Gas Procurement; as well as Mining and Quarrying, with a share of 79.9 percent of the total private external debt. Ramdan added that Indonesia's external debt structure remains healthy overall, supported by the application of prudential principles in its management. This is reflected in the ratio of Indonesia's external debt to Gross Domestic Product (GDP), which was recorded at 29.9 percent in May 2026 and is dominated by long-term external debt, accounting for 83.9 percent of the total external debt. "In order to maintain a healthy structure of external debt, Bank Indonesia and the Government continue to strengthen coordination in monitoring the developments of external debt," he stated. Loan surge Previously, the government reported the realization of net debt financing amounting to Rp 477.43 trillion in the first semester of 2026, and it is projected to reach Rp 390.69 trillion in the second semester. In total, the debt financing for 2026 will amount to Rp 868.12 trillion, consisting of government securities and loans. Economist from Bright Institute, Awalil Rizky, explained that the prospects for government debt financing have exceeded the state budget plan, which amounts to Rp 832.21 trillion. This is particularly in line with the prospect of net borrowing, which has surged fourfold, from the initial plan of Rp 32.67 trillion to Rp 131.56 trillion. "The principal debt payment in 2026 is estimated to reach Rp 930 trillion. With a projected net debt financing of Rp 868 trillion, the gross need for new debt withdrawals will amount to nearly Rp 1,800 trillion throughout 2026," he stated. He added that the prospects for the realization of foreign loans, which have surged fourfold from the initial planning, are in stark contrast to last year's realization. In 2025, the net foreign loans were realized at Rp 85.91 trillion, lower than the plan which reached Rp 128.13 trillion. If projections are accurate, net foreign loans in nominal terms will reach the highest level in the last two decades by 2026. Previously, an increase in foreign loans did occur in 2023, rising from IDR 29 trillion in 2022 to IDR 81.2 trillion in 2023. "It is quite surprising that in the realization of the ongoing 2026 budget year, there was a sudden increase of up to four times. This raises serious questions about the increase for what needs and to whom the debt is owed," said Awalil. According to him, foreign loans are not something that can be decided within a matter of months, especially if they are project loans. This takes into account the negotiation process with creditors as well as the fulfillment of technical requirements. Unfortunately, there is insufficient information available to the public, including in the report on the implementation of the first semester of 2026. The information accessible to the community is limited to loans for additional government spending needs to strengthen economic resilience, defense, and security.