JAKARTA (TheInsiderStories) – Indonesia current account deficit narrowed to US$$4.49 billion in nine of month of 2016, or minus 1.83 percent of gross domestic products (GDP) compared to a year ago worth $4.49 billion (-2.2 percent GDP), said Hendi Sulistio, Head of Statictic Department Bank of Indonesia.
The decline in the current account deficit, He said, driven by the improvement of the trade balance of goods and services. Net export for goods recorded $3.9 billion, services worth minus $1.5 billion while primary and secondary income respectively minus $7.9 billion and $1 billion.
“Surplus of goods account is due to better non-oil and gas trade performance, reaching $5.3 billion while oil and gas trade still minus $1.3 billion. Services account getting better due to hike of travel services surplus,” she said.
She estimates CA deficit will continue to bellow 2 percent on fourth quarter and below 2.5 percent for over all 2016.
Hendi explained, the capital account rise to $9,4 billion, following the massive foreign direct investment of $5.2 billion and portofolio investment of $6.5 billion and other investment of -$2.2 following. Overall balance of payment worth of $4.9 billion in third quarter, compared to previous quarter $2.5 billion.
The balance of payments developments in turn strengthen foreign exchange reserves. Foreign exchange reserves increased from $109.8 billion at the end of the second quarter of 2016 to $115.7 billion at the end of the third quarter.
The amount of foreign exchange reserves is adequate to finance the payment of imports and government foreign debt for 8.5 months and were in on the adequacy of international standards.
Looking ahead, Bank Indonesia believes the balance of payments remains good, supported by monetary and macroprudential policy mix that is cautious, and strengthening policy coordination with the Government to encourage the acceleration of structural reforms to improve the investment climate and economic competitiveness. Bank Indonesia will also continue to be aware of various external and domestic risks that may affect the overall balance of payments.