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Indonesia books first current account surplus since 2011
Indonesia booked a US$1 billion current account surplus in the third quarter, the country’s first surplus since 2011, as imports fell faster than exports due to weak domestic demand amid the coronavirus pandemic, Bank Indonesia (BI) announced Friday.
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One hundred dollar bills are seen in this photo illustration.
(AFP/Getty Images/Brendan Smialowski)
Indonesia booked a US$1 billion current account surplus in the third quarter, the country’s first surplus since 2011, as imports fell faster than exports due to weak domestic demand amid the coronavirus pandemic, Bank Indonesia (BI) announced Friday.
The central bank said the current account surplus was equal to 0.4 percent of the country’s gross domestic product (GDP) and a reversal from the $2.9 billion deficit – 1.2 percent of GDP – recorded in the April-to-June period.
“The gains were supported by a surplus in the goods trade balance in line with improvement in exports amid subdued imports due to weak domestic demand,” the central bank said in a statement.
Indonesia booked a trade surplus of nearly $8 billion in the July-to-September period as the country recorded $40.76 billion in exports and $32.77 billion in imports. Further, Southeast Asia’s largest economy recorded a trade surplus of $3.61 billion in October alone, its largest surplus since 2010.
A surplus in the current account balance will have a positive impact on the rupiah’s exchange value as the surplus means the country receives more foreign exchange than it pays out. The rupiah erased some of its earlier loss against the United States dollar following the announcement on Friday.
The central bank, however, also noted an increase in the services account deficit, as foreign tourist arrivals plunged and imports of telecommunication services increased.
The coronavirus outbreak has prompted several countries to implement lockdowns, preventing their citizens from traveling cross borders, including to Indonesia. Statistics Indonesia (BPS) recorded a 70.57 percent annual slump in tourist arrivals to just 3.56 million in the January-to-September period. Data from the Indonesian Hotel and Restaurant Association show that the tourist industry losses caused by the pandemic so far exceed Rp 100 trillion ($7.1 billion).
