World Economy

Indonesia’s Foreign Debt Controllable

Indonesia’s Foreign Debt ControllableIndonesia’s Foreign Debt Controllable

Bank Indonesia Governor Perry Warjiyo is of the view that Indonesia’s foreign debt is still in the safe zone compared to the ratio of the country’s gross domestic product. “Viewing several indicators of the issue of foreign debt, its ratio against the GDP is still quite safe for the government and private sector,” said Perry, Antara reported. Bank Indonesia recorded the country’s foreign debt up to April 2018 was growing slowly to $356.9 billion. The foreign debt of the government and central bank is $183.8 billion and debt of the private sector and the state-owned enterprises amounts to $173.1 billion. “Don’t just look at the nominal since it’s relative to current situations. One US dollar today is different to the one US dollar 10 years ago. It must be compared fairly” said Perry. Moreover, he claims that the debt service ratio is still  safe. The Bank Indonesia’s governor argues that there are cautionary provisions, especially for non-corporate private sector foreign debt, which can be seen in the hedging obligations.

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