JAKARTA (TheInsiderStories) – Bank Indonesia (BI) expect the current account deficit (CAD) in the fourth quarter (4Q) of 2018 in the range at US$8 billion, or around three percent of gross domestic products (GDP). In the 3Q of last year the CAD worth of $8.8 billion.

The reasoned, said the central bank’ Governor Perry Warjiyo on Jan. 30, there are still pressure on the global economy and the lowering price of domestic commodities.

In the future, he believes that this deficit will gradually decline by boosting exports, suppressing imports, B20 programs, tourism promotion programs and postponement of infrastructure projects.
“I think this year’ current account deficit will fall to the range of 2.5 percent of GDP, thanks to potential of foreign funds and portfolios,” he said.

BI just reported that in the 4Q of 2018, balance of payment (BoP) surplus $5 billion surplus. The surplus is supported by the investment in that period.

The Bank also hopes that this year the global pressure on the national economy will not be as similar as last year. The existence of a trade war between China and the United States (US) has put pressure on the global economy.
He revealed, that this year BI estimated the Indonesian economy could grow in the range of 5.0-5.4 percent. This figure is more optimistic when compared to Indonesia’s economic growth projection in 2018 which is pegged at 5.1-5.2 percent.
“We predict that our GDP will range from 5.0 to 5.4 percent compared to last year. The midpoint is 5.1 percent,” Warjiyo said.
He added, economic growth in 2018 which is estimated to be in the range of 5.2 percent is a positive growth rate. The national economy will be supported by domestic demand and household consumption growth.
“Investment also grows 6.5-6.9 percent, we have to grow bigger if we want to increase our GDP. “In total, the disaggregation of economic growth from domestic demand is seen from the 5.5 percent investment growth,” he explained.
For that, he added, the export side must also be boosted, so that later it will encourage Indonesia’s trade balance to be able to surplus. By boosting exports, it is expected that this year’s national economy will be better than last year.
“It is a challenge from external demand that we increase exports, but we have to restrain our imports, because the negative and negative exports are smaller,” he concluded.
Written by Staff Editor, Email: theinsiderstories@gmail.com