Seasonal Pattern Influenced BOP Q2/2019, External Resilience Maintained - Bank Sentral Republik Indonesia
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July 08, 2020


Indonesia’s Balance of Payment (BOP) in Q2/2019 showed maintained external resilience, amidst less conducive global economic dynamics and domestic seasonal pattern. Indonesia’s BOP in Q2/2019 remained solid supported by sustained capital and financial account surplus, reflecting positive investors perceptions to the Indonesia economic outlook. Meanwhile, current account deficit increased from USD7.0 billion (2.6% of GDP) in the previous quarter to USD8.4 billion (3.0% of GDP) influenced by seasonal trends of repatriate dividends and service interest payments on external debt, as well as global economic moderation and lower commodity prices. Accordingly, despite a deficit of USD2.0 billion in Q2/2019, BOP registered a surplus of USD0.4 billion in the first half of 2019. The surplus was backed by a surged in the capital and financial account and managed current account deficit of 2.8% of GDP which lied within the safe range. The position of official reserve assets stood at USD123.8 billion at the end of June 2019, equivalent to 7.0 months of imports or 6.8 months of imports and servicing government’s external debt, which is well above the international standard of 3 months of imports.

Capital and financial account surplus remained significant in Q2/2019 despite mounting uncertainty in the global financial markets and the seasonal trends of external debt repayment. The capital and financial account in Q2/2019 recorded a USD7.1 billion surplus, bolstered by foreign capital inflows in the form of direct investment and portfolio investment. Inflows in foreign direct investment increased to USD7.0 billion from USD6.1 billion in the previous quarter. The foreign portfolio investment inflows also remained high at USD4.5 billion. However, other investment registered deficit that influenced by seasonal effect due to the large repayment on the maturing government and private external debt. Accordingly, capital and financial account surplus amounted to USD17.0 billion in the first half of 2019, higher than USD5.3 billion surplus in the first half of previous year.

The widened current account deficit in Q2/2019 was driven by seasonal trends of repatriate dividends and service interest payments on external debt, coupled with unfavorable global economic conditions. Primary income account deficit increased in Q2/2019 due to seasonal factor of repatriate dividends and service interest payments on external debt. In addition, non-oil and gas export performance also declined impacted by global economic moderation and lower export commodity prices. Non-oil and gas export was recorded USD37.2 billion, down from USD38.2 billion in the previous quarter. Oil and gas trade balance deficit recorded a USD3.2 billion, up from USD2.2 billion in the previous quarter due to rising average global oil price and increasing seasonal import demand for oil and gas during the Eid-ul-Fitr and school holiday.

Looking forward, Indonesia’s BOP is expected to remain positive and bolstering external sector resilience. The BOP outlook is supported by current account deficit in 2019, which is projected to be narrower than 2018, within a safe range of 2.5%-3.0% of GDP. Foreign capital inflows are expected to remain high, driven by positive investors perceptions to the Indonesia economic outlook. Bank Indonesia will continue to strengthen coordination with the Government and relevant authorities to improve external sector resilience as well as to attract Foreign Direct Investment (FDI).

Further information and data are presented in the Q2/2019 Indonesia Balance of Payments Report of Bank Indonesia website.

Jakarta, 9th August 2019


Onny Widjanarko
Executive Director


The next publication of Indonesia’s BOP statistics is scheduled on November 8, 2019



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