Indonesia posted a surplus in its balance of payments for the second successive quarter thanks to the improvement in the current account deficit and surge in capital and financial accounts, Bank Indonesia (BI) announced on Friday.
The balance of payments surplus was recorded at US$2.41 billion in the first quarter, lower than the $5.41 billion surplus recorded in the fourth quarter of last year.
BI spokesman Onny Widjanarko said in a statement that the lower surplus was due to payment of the government’s global bonds that reached maturity.
The surplus contributed to the increase in foreign exchange reserves to $124.53 billion, up from $120.65 billion recorded in the previous quarter.
The current account deficit stood at 2.6 percent of GDP, or equal to $7 billion, in the first quarter as the trade balance reversed to a surplus of $1.1 billion after deficits were booked in the previous two quarters.
“The decline in the current account deficit was thanks to the increase in the trade balance surplus, which was in line with the surplus increase in the nonoil and gas trade balance as well as improvements in the oil and gas trade deficit,” said Onny.
Onny added the trade balance surplus in the first quarter was due to the decline in imports compared to exports, in line with the government’s import control policies that were rolled out last year, such as the wider mandate for 20 percent blended biodiesel as well as the higher import tax for 1,147 consumer goods.
Indonesia booked a $10.1 billion surplus in the capital and financial accounts thanks to inflows of foreign direct investment as well as portfolio investments, signaling investors’ positive sentiment to the Indonesian economy.
Onny said Indonesia’s balance of payment position was projected to improve as the central bank continued to work with the government and relevant authorities to strengthen external resiliency with the aim to reduce the current account deficit to 2.5 percent of GDP this year. (bbn)