Indonesia's International Investment Position Net Liabilities Rise in Fourth Quarter 2025
Indonesia’s International Investment Position (PII) in the fourth quarter of 2025 recorded increasing net liabilities. At the end of Q4 2025, net liabilities stood at $272.6 billion, higher than the net liabilities of $261.8 billion recorded at the end of Q3 2025.
The rise in net liabilities was influenced by an increase in Foreign Financial Liabilities (KFLN) that was larger than the increase in Foreign Financial Assets (AFLN).
According to a Bank Indonesia press release, Indonesia’s AFLN position increased, particularly driven by an increase in foreign exchange reserves and direct investment. The AFLN position at the end of Q4 2025 was recorded at $558.5 billion, rising from $545.5 billion at the end of Q3 2025. Most AFLN components recorded position increases. In addition to foreign exchange reserves, the AFLN increase was also driven by direct investment and portfolio investment. The increase in AFLN position was also influenced by rising gold prices and global stock price indices.
Indonesia’s KFLN position increased, particularly influenced by an increase in portfolio investment positions amid persistently high global financial market uncertainty. The KFLN position at the end of Q4 2025 was recorded at $831.1 billion, up from $807.3 billion at the end of Q3 2025. The increase in the KFLN position was primarily sourced from inflows of foreign capital into portfolio investment, direct investment, and other investment, reflecting the maintenance of positive investor perception regarding Indonesia’s economic prospects and investment climate. The increase in the KFLN position was also influenced by strengthening domestic stock price indices.
Overall for 2025, Indonesia’s PII also recorded an increase in net liabilities compared to the position at the end of 2024. The net liabilities of Indonesia’s PII increased from $245.7 billion at the end of 2024 to $272.6 billion at the end of 2025. The increase in net liabilities of the PII was sourced from an increase in the KFLN position of $61.9 billion (8.0 per cent, year-on-year) that was higher than the increase in the AFLN position of $34.9 billion (6.7 per cent, year-on-year). The increase in the KFLN position was primarily influenced by foreign capital inflows in the form of direct investment accompanied by an increase in domestic stock prices. Meanwhile, the increase in the AFLN position was influenced by improvements in all components, both in the form of direct investment, portfolio investment, other investment, and foreign exchange reserves.
Bank Indonesia views the development of Indonesia’s PII in Q4 2025 and for the whole of 2025 as remaining sound, thereby supporting external resilience. This is reflected in Indonesia’s PII-to-GDP ratio in 2025 remaining stable at 18.8 per cent and the structure of Indonesia’s PII liabilities being dominated by long-term instruments (93.2 per cent), particularly in the form of direct investment.
Going forward, Bank Indonesia will continue to monitor global economic dynamics that could affect Indonesia’s PII prospects and continue to strengthen its policy mix response supported by close policy synergy with the Government and relevant authorities to strengthen external sector resilience. Additionally, Bank Indonesia will continue to monitor potential risks related to developments in PII net liabilities against Indonesia’s economy.