Current Account Deficit Improved, External Resilience Maintained - Bank Sentral Republik Indonesia
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October 01, 2020


Indonesia’s Balance of Payment (BOP) in Q3/2019 pointed out that Indonesia’s external economic resilience has been maintained against a backdrop of global economic moderation. Indonesia’s BOP improved by recording a deficit of USD46 million in Q3/2019, significantly reduced from the deficit of USD2.0 billion in the previous quarter. Solid BOP performance was supported by a lower current account deficit coupled with a higher capital and financial account surplus. Consequently, the position of official reserve assets stood at USD124.3 billion at the end of September 2019, increased from USD123,8 billion at the end of June 2019. The official reserve assets position was equivalent to finance 7.2 months of imports or 6.9 months of imports and servicing government’s external debt, which is well above the international adequacy standard of three months of imports.

Current account deficit narrowed, supported by lower a oil and gas trade deficit amidst a stable non-oil and gas trade surplus. The current account deficit decreased from USD8.2 billion (2.9 of GDP) in Q2/2019 to USD7.7 billion (2.7% of GDP) in Q3/2019. Ameliorated performance of the current account was attributed to an upturn goods trade surplus linked to the lower oil and gas trade deficit, amidst the stable non-oil and gas trade surplus. The oil and gas trade deficit narrowed as declining imports, in line with the positive impact of import control policies, including the B-20 program. Meanwhile, non-oil and gas trade surplus relatively stable amidst a weakening global economy and declining export commodity prices. Improvement in the current account deficit was also backed by a decrease in the primary income deficit due to smaller dividends repatriation and service interest payments on external debt.

Capital and financial account surplus rose, reflecting investor optimism of the domestic economic outlook. The capital and financial account surplus stood at USD7.6 billion in Q3/2019, up from USD6.5 billion in the previous quarter. The gain in the capital and financial account surplus primarily stemmed from a maintained foreign capital inflow to domestic financial investment assets, which has boosted portfolio investment performance. Moreover, the rising surplus was also underpinned by a lower other investment deficit, due to higher private sectors net drawings on foreign loan accompanied by a more moderate government’s foreign loan net repayments.

Looking forward, Indonesia’s BOP is expected to remain solid, thus bolstering external sector resilience. The BOP outlook is supported by a manageable current account deficit in 2019 and 2020 within 2.5-3.0% of GDP and a maintained influx of foreign capital. Bank Indonesia will continue to strengthen coordination with the Government and relevant authorities to improve external sector resilience as well as attracting more Foreign Direct Investment (FDI).

Further information and data are presented in the Q3/2019 Indonesia’s Balance of Payments Report on the Bank Indonesia website.

Jakarta, 8th November 2019


Onny Widjanarko
Executive Director



Note: The next publication of Indonesia’s BOP statistics is scheduled on 14th February 2020



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