​​​​No. 26/115/DKom

Indonesia's International Investment Position (IIP) in the first quarter of 2024 recorded a lower net liability. At the end of the first quarter of 2024, Indonesia's IIP amassed a net liability totalling USD253.0 billion, down from USD261.2 billion at the end of the fourth quarter of 2023. The lower net liability IIP was contributed by a lower Foreign Financial Liabilities (FFL) position, coupled with a higher Foreign Financial Assets (FFA) position.

The FFL position declined amid persistently solid foreign capital inflows to direct investment. The FFL position at the end of the first quarter of 2024 fell 0.8% (qtq) to USD738.7 billion from USD745.1 billion at the end of the fourth quarter of 2023. Persistent foreign capital inflows to direct investment influenced the latest FFL position developments, reflecting maintained investor optimism in the promising domestic economic outlook. Meanwhile, portfolio investment in the form of domestic debt securities experienced a net outflow, in line with rising global financial market uncertainty. The lower FFL position was also influenced by other change factors, consistent with broad-based US dollar appreciation against most global currencies, including the Rupiah, thus eroding the value of domestic financial instruments.

Indonesia's FFA position increased on a surge of investments by residents in various financial instruments abroad. The FFA position at the end of the first quarter of 2024 stood at USD485.7 billion, up 0.4% (qtq) from USD483.9 billion at the end of the fourth quarter of 2023. Nearly all FFA components recorded an increase of placements abroad, led by other investment assets in the form of deposits and trade credit. However, other change factors in line with broad-based US dollar appreciation against most global currencies offset a further surge in the FFA position.

Bank Indonesia views the recent developments in Indonesia's IIP in the first quarter of 2024 as solid, thus supporting external resilience.  This was reflected in the decreasing ratio of Indonesia's IIP to GDP, from  19.0% in the fourth quarter of 2023 to 18.4% in the first quarter of 2024. Furthermore, long-term maturity instruments (93.6%) continued to dominate Indonesia's liability IIP structure, primarily in the form of direct investment. Moving forward, Bank Indonesia will remain vigilant of global economic dynamics that could impact the IIP outlook, while strengthening the policy mix response supported by close synergy with the Government and relevant authorities to bolster external sector resilience.  Moreover, Bank Indonesia will also remain observant of the potential risks posed by a net liability IIP on the economy.

Further information is presented in Indonesia's IIP Report Q1/2024 on the Bank Indonesia website.

Jakarta 5th June 2024

Communication Department

Erwin Haryono

Governor Assistant​