Jakarta: Indonesia’s Balance of Payments (BOP) in 2019 registered a surplus of USD4.7 billion, improving from a deficit of USD7.1 billion in 2018.
"The BOP developments in 2019 reflected solid external sector resilience," Bank Indonesia (BI) said in a press release issued on Monday, February 10, 2020.
"This improvement was driven by decreasing current account deficit and soaring capital and financial account surplus," the central bank stated.
The current account deficit narrowed to USD30.4 billion or 2.72 percent of GDP from deficit of 2.94 percent of GDP in the last year. Such developments was primarily stemmed from goods trade surplus, in contrast to the deficit posted in the previous year.
The goods trade surplus was attributed to the increase in non-oil and gas trade surplus combined with the decline in oil and gas trade deficit as an impact of policies to control import, including B20 program which has reduced oil imports.
In addition, despite uncertainty blighting the global financial markets, the capital and financial account recorded a significant USD36.3 billion surplus, up from 25.2 billion surplus in the 2018, driven by a deluge of long-term capital inflows.
Looking forward, Indonesia’s BOP is expected to remain solid, thus bolstering external sector resilience. The BOP outlook is supported by a manageable current account deficit in 2020 within 2.5-3.0 percent of GDP and a maintained influx of foreign capital riding on positive investor perception in the domestic economic outlook.
BI will continue to strengthen policy mix in order to maintain macroeconomic and financial system stability, and strenghthen policy synergy with the Government and other relevant authorities to improve external sector resilience, including efforts to attract more Foreign Direct Investment (FDI).