Indonesia's balance of payments for 2011 registered a surplus of US$11.9 billion. Contributing to this performance were surpluses in the current account and the capital and financial account at US$2.1 billion and US$14.0 billion respectively. The current account surplus was sustained by respectable export growth despite slackening world demand. Similarly, the capital and financial account surplus was bolstered by higher inflows of foreign direct investment (FDI) and drawing on private external debt in keeping with the conducive investment climate and stable macroeconomic condition. Consequently, international reserves widened from US$96.2 billion at the end of 2010 to US$110.1 billion*) at the end of 2011, which was equivalent to 6.4 months of imports and servicing of official external debt.

In quarterly basis, the balance of payments maintained positive performance during the first and second quarters of the year, driven in part by strong increases in export commodity prices and buoyant inflows of foreign portfolio investment. However, in the third quarter, the balance of payments suffered a deficit due to the spill-over effects of the financial crisis in Europe that triggered outflows of foreign portfolio investment. Pressures on the balance of payments subsequently eased in the fourth quarter following resumption in foreign portfolio investment inflows and significant increases in foreign direct investment, as well as higher drawing on private external debt. Despite the improvement, the fourth quarter balance of payments charted a deficit in its current account. This modest deficit (about 0.4% of GDP) was explained by steady expansion in imports in line with vibrant domestic demand, while exports declined as a result of flagging world demand and weakening commodity prices.

Indonesia's balance of payments statistics for 2011 are presented in the attached table. A complete report may be accessed on the Bank Indonesia website (http://www.bi.go.id) from 23 February 2012.

Jakarta, 10 February 2012
Office of the Governor

Dyah N.K. Makhijani
Director

*) Indonesia's international reserves position at end-January 2012 reached US$112.0 billion.

Note:
The next Indonesia’s Balance of Payments press release is scheduled for 11 May 2012 (one day after the May 2012 Board of Governors' Meeting).