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BI revises current account deficit projection

  • Grace D. Amianti
    Grace D. Amianti

    The Jakarta Post

Jakarta | Fri, February 17, 2017 | 06:10 pm
BI revises current account deficit projection The logo of Bank Indonesia marks the central bank's headquarters in Jakarta. (Antara/File)

Bank Indonesia (BI) has revised down its current account deficit projection for this year as the global financial outlook remains uncertain, although the domestic economy is expected to grow at a healthy clip.

The central bank's latest assessment during its two-day board of governors meeting held on Tuesday and Thursday found that the country's current account deficit (CAD) for this year was predicted to reach 2.11 percent of gross domestic product (GDP), lower than the 2.4 percent listed in an earlier projection.

Despite the smaller figure, this year's prediction is still higher than the 2016 result, when the current account deficit stood at only 1.8 percent of GDP.

(Read also: Strengthening landscape for stability and growth)

BI Governor Agus Martowardojo said the central bank was preparing for expansive economic policies from the United States and a corresponding fund rate increase from the US Federal Reserve, which could attract capital outflows from emerging markets like Indonesia.

"However, the view of global [investors] toward Indonesia remains positive because the country is one of the best three emerging markets for investment," he told reporters at the central bank's headquarters on Friday.

Agus went on to say that the higher current account deficit projection this year also indicated optimism toward Indonesia's economy compared with last year due to improvements in prices of the country's main commodity exports, such as crude palm oil (CPO) and coal. (bbn)