No. 26/180/DKom
Indonesia's Balance of Payments (BOP) improved in the second quarter of 2024, thus supporting external resilience. Indonesia's BOP recorded a narrower USD0.6 billion deficit in the reporting period compared with a USD6.0 billion deficit in the first quarter of 2024. The improvement was supported by an increased performance of capital and financial account, which booked a surplus, accompanied by a manageable current account deficit. Consequently, the position of reserve assets at the end of June 2024 remained high at USD140.2 billion, equivalent to 6.2 months of import and servicing government external debt, which is well above the international reserve adequacy standard of around 3 months of import.
The current account booked a low deficit. In the second quarter of 2024, the current account amassed a USD3.0 billion deficit (0.9% of GDP), slightly higher than the USD2.4 billion deficit (0.7% of GDP) recorded in the first quarter of 2024. The goods trade balance recorded a larger surplus, stemming from a narrower oil and gas trade deficit coupled with a relatively stable non-oil and gas trade surplus. Non-oil and gas exports recorded positive growth given improving commodity prices and demand from Indonesia's major trading partners, while non-oil and gas imports remained relatively stable in line with sustained domestic economic activity. The services trade deficit increased due to a travel services deficit incurred, following the 2024 Hajj pilgrimage. In addition, the primary income account deficit also increased as a result of dividend and interest/coupon payments in line with quarterly trends.
Capital and financial account performance improved despite persistently high global financial market uncertainty. The capital and financial account amassed a USD2.7 billion surplus in the second quarter of 2024 to reverse the USD1.6 billion deficit recorded in the first quarter of 2024. The turnaround was primarily supported by a surge of portfolio inflows despite persistenly high global financial market uncertainty. Direct investment maintained a surplus in line with investor optimism concerning the promising domestic economic outlook and conducive domestic investment climate. Other investments booked a narrower deficit given a decline of private investment in several financial instruments abroad amid an increase in scheduled private external debt payments.
Moving forward, Bank Indonesia will remain vigilant regarding global economic dynamics that may impact the BOP outlook and will continue strengthening its policy mix response, supported by close policy synergy with the Government and other relevant authorities to reinforce external sector resilience. BOP performance in 2024 is projected to be maintained in line with a low and manageable current account deficit in the 0.1%-0.9% of GDP range. The capital and financial account surplus is expected to persist on the back of foreign capital inflows in the form of foreign direct investment (FDI) and portfolio investment, given positive investor perception of the promising domestic economic outlook along with attractive yields on financial assets for investment.
Further information and data are presented in the Q2/2024 Indonesia Balance of Payments Report, accessible via the official Bank Indonesia website.
Jakarta 22nd August 2024
Communication Department
Erwin Haryono
Assistant Governor
