Indonesia's Net International Investment Position Rises in 2025
Indonesia’s International Investment Position (IIP) at the end of 2025 shows an increase in net liabilities to foreign investors. Data indicates that Indonesia’s financial obligations to foreign parties remain greater than the financial assets held by Indonesian citizens abroad.
Bank Indonesia (BI) recorded net liabilities in the fourth quarter of 2025 at $272.6 billion. This figure is higher than the third quarter of 2025, which was $261.8 billion. The increase is attributed to a larger rise in foreign financial liabilities compared to the growth in Indonesia’s foreign financial assets.
Executive Director of BI’s Communications Department, Ramdan Denny Prakoso, explained that this development is reflected in the rise in foreign financial liabilities. Net liabilities at the end of the fourth quarter of 2025 were recorded at $272.6 billion, higher than $261.8 billion at the end of the previous quarter.
According to Ramdan, the increase in net liabilities is influenced by a larger rise in foreign financial liabilities than the increase in foreign financial assets.
Indonesia’s foreign financial assets (AFLN) at the end of the fourth quarter of 2025 were recorded at $558.5 billion, up from $545.5 billion in the third quarter of 2025. BI explained that this increase was driven by growth in several major components, including foreign direct investment and portfolio investment.
Ramdan added that Indonesia’s AFLN position increased primarily due to gains in foreign exchange reserves and foreign direct investment. Additionally, the rise in AFLN was also influenced by foreign direct investment and portfolio investment.
Beyond investment transactions, changes in asset values are also influenced by valuation factors. Rising gold prices and global equity price indices contributed to the increase in foreign asset positions.
In the structure of Indonesia’s foreign financial assets, the largest components come from other investments, foreign direct investment, and foreign exchange reserves. The value of Indonesia’s foreign direct investment at the end of the fourth quarter of 2025 was recorded at approximately $143.7 billion. This investment consists of equity capital and debt instruments held by domestic investors in foreign companies.
Meanwhile, portfolio investment by Indonesian residents abroad was recorded at approximately $40.6 billion at the end of 2025. Other investment components, including loans, deposits, and trade payables, also recorded significant values of more than $216 billion.
Indonesia’s foreign exchange reserves are also a major component of foreign financial assets. At the end of 2025, the foreign exchange reserves position in the IIP calculation was recorded at approximately $156.5 billion. This component consists of monetary gold, special drawing rights (SDR), IMF reserves, and other reserve assets.
Foreign Financial Liabilities Increase
On the other side, Indonesia’s foreign financial liabilities also increased at the end of 2025. BI recorded Indonesia’s foreign financial liabilities position at the end of the fourth quarter of 2025 at $831.1 billion. This value increased from $807.3 billion at the end of the third quarter of 2025.
According to BI, the increase in foreign financial liabilities was primarily driven by growth in portfolio investment. Ramdan explained that Indonesia’s KFLN position increased mainly due to a rise in portfolio investment positions amid continued high uncertainty in global financial markets.
Additionally, the increase in foreign liabilities also stemmed from capital inflows into foreign direct investment, portfolio investment, and other investments. The central bank views these capital flows as reflecting positive investor perception of Indonesia’s economic prospects and domestic investment climate.
The rise in KFLN position mainly stemmed from foreign capital inflows into portfolio investment, foreign direct investment, and other investments, which reflect sustained positive investor perception towards Indonesia’s economic prospects and investment climate, Ramdan stated.
Beyond capital flows, changes in liability positions were also influenced by valuation factors, including strengthening of domestic equity price indices.
Foreign Direct Investment as Largest Component
In the structure of Indonesia’s foreign financial liabilities, foreign direct investment is a major component. Data from the International Investment Position report shows that the value of foreign direct investment in Indonesia at the end of the fourth quarter of 2025 reached approximately $347.6 billion.
This foreign direct investment consists of two main components: equity capital and debt instruments between parent companies and subsidiaries. Beyond foreign direct investment, another major component of foreign liabilities is portfolio investment.
At the end of 2025, the value of foreign portfolio investment in Indonesia was recorded at approximately $293.5 billion. Portfolio investment instruments include ownership of shares and domestic bonds by foreign investors.
Other liabilities also include various instruments such as foreign loans, deposits, and other financial liabilities. The component of other investments in Indonesia’s foreign liabilities was recorded at approximately $188.8 billion at the end of 2025.
Net Liabilities Increased Throughout 2025
Overall for the year 2025, Indonesia’s net international investment position liabilities also increased compared to the end of the previous year. BI recorded Indonesia’s IIP net liabilities increasing from $245.7 billion at the end of 2024 to $272.6 billion at the end of 2025.
This increase occurred because the rise in foreign financial liabilities was higher than the increase in foreign financial assets.