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2/18/2022 12:00 AM
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Indonesia’s Balance of Payments (BOP) in Q4/2021 Remained Solid, External Resilience Maintained

 
Press Releases

No. 24/58/DKom

Indonesia's Balance of Payments (BOP) continued to perform soundly in Q4/2021, thereby reinforcing external resilience. The BOP recorded a low deficit at USD0.8 billion in Q4/2021, supported by a maintained current account surplus amidst a capital and financial account deficit. For the year, therefore, the BOP amassed a relatively high surplus of USD13.5 billion in 2021. The position of reserve assets increased to USD144.9 billion at the end of December 2021, equivalent to 7.8 months of imports and servicing Government’s external debt, which is well above the international adequacy standard.

The current account continued to book surplus in Q4/2021, supported by remained high goods trade surplus. In the reporting period, the current account extended USD1.4 billion surplus (0.4% GDP), despite moderated from USD5.0 billion surplus (1.7% of GDP) achieved in the previous quarter. A goods trade surplus bolstered the current account surplus as global demand and rising commodity prices, especially coal prices, edged up export performance. In line with the recovering domestic economic activity and solid exports, imports also grew steadily, thereby restraining a further surplus in the goods trade balance. The performance of current account was also supported by an increase in the secondary income account surplus due to higher receipts of Government grants in the health sector for handling the Covid-19 pandemic. Meanwhile, the services trade balance deficit widened, mainly due to the increasing transportation services deficit affected by rising import freight services payments. Furthermore, primary income account deficit widened in line with the improvement of corporate performance during the reporting period.    The performance of the capital and financial account remained solid in the fourth quarter of 2021, primarily supported by direct investment surplus amidst the continuation of global financial market uncertainty. Investor optimism concerning the promising domestic economic outlook induced the increasing net inflow of direct investment totaling USD3.4 billion in Q4/2021 from the USD3.2 billion surplus achieved in the previous quarter. On the other hand, the continuing uncertainty in global financial market has led to adjustments in capital outflows for portfolio investment, especially in the form of domestic Government Securities (SBN), amidst the surplus in stock instruments. In addition, other investments recorded a deficit, partly induced by rising repayments on maturing external debts in the private sector. Consequently, the capital and financial account in Q4/2021 posted a USD2.4 billion deficit (0.7% GDP).

For the year, therefore, the balance of payments recorded a high surplus in 2021, hence maintaining external sector resilience. The BOP surplus was recorded at USD13.5 billion in 2021, significantly higher than the previous year’s surplus of USD2.6 billion. The BOP surplus originated from a current account surplus coupled with capital and financial account surplus. In 2021, the current account booked a USD3.3 billion surplus (0.3% GDP), after recording USD4.4 billion deficit (0.4% GDP) in 2020. The surplus was mainly supported by rapid export performance in line with increasing demand from trading partner countries and high global commodity prices, amidst increasing imports as the domestic economic recovery progressed. In addition, the capital and financial account in 2021 also booked a USD11.7 billion, higher than a USD7.9 billion surplus achieved in the previous year, mainly supported by direct investment and portfolio investment.    

Looking forward, Bank Indonesia will carefully observe global economic dynamics that can affect Indonesia's BOP outlook, continually strengthen the policy mix to maintain economic stability, and continue policy coordination with the Government and relevant authorities to bolster the external sector resilience.

Further information and data are presented in Q4/2021 Indonesia's Balance of Payments Report on the Bank Indonesia website.

 

Jakarta, 18th February 2022

Head of Communication Department

Erwin Haryono

Executive Director

 

Information on Bank Indonesia

Tel. 021-131, email: bicara@bi.go.id

 

 

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