Indonesia's Balance Of Payments Post $4.1 Billion Surplus in Q1

Jakarta: Indonesia's Balance of Payments (BOP) in the first quarter of 2021 booked surplus, reinforcing external resilience, Bank Indonesia (BI) has stated. 
 
The BOP recorded a surplus at USD4.1 billion in the Q1/2021, after experiencing deficit of USD0.2 billion in the previous quarter. 
 
The surplus stemmed from a larger increment of capital and financial account surplus that exceeded the narrowed current account deficit. 

"The current account in Q1/2021 charted a low deficit amidst maintained goods trade balance surplusm" said BI Communication Department Head Erwin Haryono in a press release on Friday.
 
The current account deficit stood at USD1.0 billion (0.4% of GDP), reversing a surplus of USD0.9 billion (0.3% of GDP) in the previous quarter. 
 
Such development was supported by goods trade surplus due to stronger exports in line with increasing demand in Indonesia's main trading partners and rising global commodities prices. 
 
In line with positive export developments and domestic demand improvement, import performance has also increased substantially, thus holding back a further goods trade balance surplus. 
 
Meanwhile, the services trade balance deficit expanded, partly due to a widening deficit in transportation services as a result of rising freight services payments as goods imports increased.
 
Meanwhile, the primary income account recorded a narrower deficit from the previous quarter due to declining coupons and dividend payments of portfolio investment.
 
"Capital and financial account posted a surplus in Q1/2021 primarily supported by portfolio investment," he stated.
 
In Q1/ 2021, the capital and financial account recorded a surplus of USD5.6 billion (2.0% of GDP), after experiencing deficit of USD1.0 billion (0,4% of GDP) in the previous period. 
 
Foreign capital inflows in portfolio investment continued to increase in line with maintained positive investor perceptions of domestic economic outlook amidst ongoing global financial market uncertainty.
 
Portfolio investment recorded net inflow of USD4.9 billion, rising from USD2.0 billion surplus  recorded in the previous quarter, primarily attributable to the issuance of global bonds and increasing foreign capital inflows in the stock market. 
 
Direct investment also posted a USD4.1 billion surplus, continuing the previous quarter surplus of USD4.2 billion, mainly in the form of equity capital. 
 
Meanwhile, other investment recorded a shallower deficit, partly induced by a decrease in placements of deposits abroad.
 
"Looking forward, Bank Indonesia will carefully observe global economic dynamics that can affect Indonesia's BOP outlook, continually strengthen the policy mix to maintain economic stability, and continue policy coordination with the Government and relevant authorities to bolster the external sector resilience," he said.
 
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