The central bank of Indonesia stated that Indonesia's foreign debt grew 6.3 percent (y/y) to USD $319.0 billion in April 2016. Foreign debt of Southeast Asia's largest economy in April consists of private sector external debt (USD $165.2 billion) and public sector external debt (USD $153.8 billion). Indonesia's private sector foreign debt continued to ease as local companies have been more careful in taking up new foreign debt due to the weakening rupiah in 2013-2015. In April, private sector external debt fell 1.1 percent (y/y).

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Although a huge amount of debt paper will mature in 2016, there is few concern that the Indonesian government and the nation's private companies will fail to meet their debt obligations. Per 17 February, total outstanding debt paper that is to mature in 2016 stands at IDR 320.9 trillion (approx. USD $23.8 billion), consisting of IDR 268.1 trillion (approx. USD $19.9 billion) of government bonds (Surat Utang Negara or SUN) and IDR 52.8 trillion (approx. USD $3.9 billion) of private sector corporate bonds. Why are there no major concerns about Indonesia's debt situation in 2016?

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Executive director of equity research at JP Morgan Securities Indonesia Aditya Srinath painted a positive picture about the equity market in Indonesia despite the lingering risks emerging from domestic political instability and looming capital outflows due to higher US interest rates in the second quarter of 2015. Srinath stated that Indonesia’s economic resilience so far as well as falling domestic interest rates among Indonesian financial institutions are positive signs for the equity market.

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