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Jakarta Post

Indonesia posts $4.4 billion balance of payment deficit in Q3

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Fri, November 9, 2018   /   08:10 pm
Indonesia posts $4.4 billion balance of payment deficit in Q3 A pedestrian passes by the Bank Indonesia (BI) building in Jakarta. (*/TRIBUNNEWS)

Indonesia recorded a balance of payment deficit of US$4.4 billion in the third quarter as its capital and financial account surplus was not sufficient to cover its growing current account deficit (CAD), Bank Indonesia (BI) announced on Friday. 

The CAD widened to $8.8 billion in the third quarter of this year, equal to 3.37 percent of gross domestic product (GDP), bring the CAD to 2.86 percent year-to-date.

The latest figure was higher than the CAD of $8 billion recorded a quarter earlier, which was equal to 3 percent of GDP. 

BI said in a statement published on its website that the widening of the CAD was driven by a decline in the balance of trade in goods, while the deficit in the balance of trade in services increased.

“The decline in the balance of trade in goods was due to the increase in the oil-and-gas trade deficit, while the upswing in the non-oil-and-gas surplus was limited due to high imports mainly driven by large domestic demand,” said BI spokesman Agusman, adding that the outlook remained positive. 

Read also: Bank Indonesia projects current account deficit to hit $25 billion this year

The capital and financial accounts, meanwhile, booked a $4.2 billion surplus in the third quarter driven by an inflow of foreign direct and portfolio investment, reflecting investors’ confidence in the domestic economy.

The balance of payment deficit was reflected in the foreign exchange reserves, which declined to $114.8 billion in September from $117.9 billion a month earlier. 

Agusman said BI and the government would maintain the CAD below 3 percent of the GDP. (gda)