No. 26/255/DKom
Indonesia's Balance of Payments (BOP) improved in the third quarter of 2024, thus supporting external resilience. Indonesia's BOP recorded a USD5.9 billion surplus in the third quarter of 2024, improving from a USD0.6 billion deficit in the second quarter of 2024. The BoP surplus was supported by a wider capital and financial account surplus, coupled with a narrower current account deficit. Consequently, the position of reserve assets increased from USD140.2 billion at the end of June 2024 to USD149.9 billion at the end of September 2024, equivalent to 6.4 months of imports and servicing government external debt, which is well above the international reserve adequacy standard of around 3 months of imports.
The current account booked a narrower deficit. In the third quarter of 2024, the current account deficit stood at USD2.2 billion (0.6% of GDP), decreasing from USD3.2 billion (0.9% of GDP) in the second quarter of 2024. Current account performance was supported by a continued non-oil and gas trade surplus in response to growth of non-oil and gas exports on the back of higher commodity prices, amid higher imports to fuel increasing domestic economic activity. The services trade deficit narrowed on a larger travel services surplus due to an influx of inbound international travellers. The primary income account deficit also decreased given lower investment income payments to non-resident investors. In addition, a larger secondary income account surplus was driven by remittance receipts, which further bolstered the current account balance.
The capital and financial account surplus persisted. The capital and financial account surplus was recorded at USD6.6 billion in the third quarter of 2024, increasing from USD3.0 billion in the second quarter of 2024. Direct investment posted a larger surplus, primarily due to equity investment in the manufacturing industry, health services, as well as transportation, storage and communication, in line with positive investor perception of the promising national economic outlook. Foreign capital inflows to various portfolio investment instruments also increased due to attractive return on investment. On the other hand, other investments recorded a higher deficit driven by an increase of private investment placements in various financial instruments abroad.
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. The BOP performance in 2024 is projected to remain solid 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 increasing direct investment and portfolio investment 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 Q3/2024 Indonesia Balance of Payments Report , accessible via the official Bank Indonesia website.
Jakarta 21st November 2024
Communication Department
Ramdan Denny Prakoso
Executive Director
