Indonesia's International Investment Position (IIP) recorded a higher net liability at the end of the fourth quarter of 2025 (31/12). The net liability IIP reached USD 272.6 billion, up from USD 261.8 billion at the end of the third quarter. This increase occurred because Foreign Financial Liabilities (FFL) grew faster than Foreign Financial Assets (FFA).

Foreign Financial Assets Increase Driven by Reserves and Investments

Indonesia's FFA rose to USD 558.5 billion at the end of Q4 2025, compared with USD 545.5 billion in Q3. The growth came mainly from higher reserve assets, foreign direct investment, and portfolio investment. Rising gold prices and global equity markets also contributed to the increase in FFA.

Foreign Financial Liabilities Rise Amid Portfolio Investment Inflows

The FFL position increased to USD 831.1 billion at the end of Q4 2025, from USD 807.3 billion at the end of Q3. The increase was driven by foreign capital inflows in portfolio investment, direct investment, and other investment. Higher domestic equity prices also supported the growth, reflecting continued positive investor perceptions of Indonesia's economic outlook and investment environment.

Year-on-Year Net Liability IIP Growth

Compared with the end of 2024, Indonesia's net liability IIP rose from USD 245.7 billion to USD 272.6 billion in 2025. The FFL grew by USD 61.9 billion (8.0% YoY), exceeding the FFA growth of USD 34.9 billion (6.7% YoY). The higher FFL was mainly due to foreign direct investment and rising domestic equity prices, while the FFA increased across all components, including direct investment, portfolio investment, other investment, and reserve assets.

Bank Indonesia Stresses Vigilance and External Resilience

Bank Indonesia views the developments in Q4 2025 and throughout 2025 as strengthening external resilience. The IIP-to-GDP ratio remained at 18.8%, and liabilities were dominated by long-term instruments, mainly direct investment (93.2%). Bank Indonesia will continue to monitor global economic dynamics, coordinate policies with the government, and assess potential risks from net liability IIP to the domestic economy.

PHOTO: BANK INDONESIA

This article was created with AI assistance.

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