No. 27/37/DKom
Indonesia's Balance of Payments (BOP) performance in the fourth quarter of 2024 increased compared to the third quarter of 2024, thus bolstering external resilience. Indonesia's BOP recorded a USD7.9 billion surplus in the fourth quarter of 2024, increasing from a USD5.9 billion surplus in the third quarter of 2024. The larger BOP surplus was supported by a higher capital and financial account surplus, coupled with a narrower current account deficit.
The current account booked a narrower deficit in line with rising commodity prices amid maintained domestic economic activity. In the fourth quarter of 2024, the current account deficit stood at USD1.1 billion (0.3% of GDP), declining from a USD2.0 billion deficit (0.6% of GDP) in the third quarter of 2024. Improving current account performance was primarily driven by a larger goods trade surplus, supported by non-oil and gas export growth, in line with higher prices for several of Indonesia's major export commodities. On the other hand, goods imports continued to grow to meet demand during the Christmas and New Year festive period. This trend also led to an increasing freight services imports, thus contributing to a wider services trade deficit. In addition, the primary income account deficit also widened given higher investment income payment of direct and portfolio investment on the back of sustained domestic economic activity.
The capital and financial account surplus increased. The capital and financial account registered a higher surplus, rising from USD7.5 billion in the third quarter of 2024 to USD8.5 billion in the fourth quarter of 2024. The positive performance was supported by direct investment, which continued to book a surplus, in line with investor optimism concerning the promising national economic outlook and conducive domestic investment climate. Other investments also recorded a surplus due to an increase in government and private foreign loan withdrawals. Meanwhile, portfolio investment recorded a net outflow, in line with persistently high global financial market uncertainty.
Overall, BOP performance in 2024 indicated robust external sector resilience, despite persistent global financial market uncertainty. BOP performance in 2024 recorded a USD7.2 billion surplus, up from USD6.3 billion in the previous year, primarily driven by improving capital and financial account performance. The capital and financial account in 2024 recorded a USD16.4 billion surplus, increasing from USD9.9 billion surplus in 2023. The higher surplus was underpinned by foreign capital inflows in the form of direct investment and portfolio investment despite ongoing global financial market uncertainty. On the other hand, the current account in 2024 booked an USD8.9 billion deficit (0.6% of GDP) after recording a USD2.0 billion deficit (0.1% of GDP) in 2023. This widened deficit was influenced by a lower goods trade surplus as demand from Indonesia's main trading partners softened against a backdrop of persistently solid domestic demand. The reserve assets position at the end of December 2024 increased to USD155.7 billion from USD146.4 billion at the end of December 2023, equivalent to 6.5 months of imports and servicing government external debt, which is well above the international reserve adequacy standard of around three months of imports.
Moving forward, Bank Indonesia will remain vigilant regarding global economic dynamics that may impact the BOP outlook and will continue strengthening its policy mix, supported by close policy synergy with the Government and other relevant authorities to strengthen external sector resilience. The BOP performance in 2025 is projected to remain sound, bolstered by a continuing capital and financial account surplus and a maintained current account deficit in the 0.5%-1.3% of GDP range. The capital and financial account surplus is expected to persist on the back of foreign capital inflows 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 Q4/2024 Indonesia Balance of Payments Report, accessible via the official Bank Indonesia website.
Jakarta 20th February 2025
Communication Department
Ramdan Denny Prakoso
Executive Director
