IMF Acknowledges Indonesia's External Debt is Safe, Avoiding Default Risk

The International Monetary Fund (IMF) has revealed that Indonesia’s external debt risk remains fairly safe, as the short-term default risk, or rollover risk, tends to be limited.

However, the relatively high dependence on foreign portfolio investment makes Indonesia vulnerable to fluctuations in global financial market sentiment.

In a recently released report, the IMF explained that Indonesia’s gross external debt remained at a moderate level of 30.0% of gross domestic product (GDP) at the end of 2025, down slightly from 30.4% of GDP in 2024.

“Short-term external debt rollover risk remains manageable, as reflected in the large share of Indonesia’s long-term debt,” the IMF said in its report, quoted on Friday (7/8/2026).

In addition, the Net International Investment Position (NIIP) declined to negative 18.9% at the end of 2025, from negative 17.6% in 2024.

The IMF added that the NIIP-to-GDP ratio is projected to stabilise at its current level over the medium term, as strong nominal GDP growth will offset the projected small current account deficit.

Nevertheless, the IMF expects the current account deficit to widen in 2026, affected by the war in the Middle East.

“The current account deficit is expected to remain near its normal level throughout the projection period, in line with stable savings and investment prospects,” the IMF explained.