Indonesia's Balance of Payments Records Deficit of $0.4 Billion in Q2 2021: BI

Jakarta: Indonesia's Balance of Payments (BOP) in Q2/2021 remained solid, thereby reinforcing external resilience, according to Bank Indonesia (BI).
 
The BOP recorded a low deficit at USD0.4 billion in Q2/2021 on the back of a remained low current account deficit and the continued of capital and financial account surplus. 
 
Consequently, the position of reserve assets at the end of June 2021 stood at USD137.1 billion, relatively stable from the position at the end of March 2021. 

The position of official reserve assets was equivalent to finance 8.8 months of imports and servicing Government's external debt, which is well above the international adequacy standard.
 
"The current account deficit in Q2/2021 remained low despite increasing in line with the improvement of domestic economic activity," said BI Communication Department Head Erwin Haryono in a press release on Friday.
 
The current account recorded a USD2.2 billion deficit (0.8% of GDP) In the reporting period, higher than the previous quarter deficit of USD1.1 billion (0.4% GDP). 
 
Such development was bolstered by a larger goods trade surplus as stronger demand from main trading partner countries as well as rising international commodity prices has edged up exports, amidst increment of imports as the domestic economy continues to recover. 
 
Meanwhile, the primary income deficit increased in line with an increase of yield payments in the form of dividends, which was influenced by improvement in corporate performance during the reporting period. 
 
The services trade balance deficit also widened, partly due to increasing transportation services deficit affected by rising import freight services payment.
 
"The capital and financial account remained surplus in Q2/2021, supported by direct investment and portfolio investment," he stated.
 
The capital and financial account in Q2/2021 posted a USD1,9 billion surplus (0.7% GDP), maintaining the previous quarter's surplus of USD5.5 billion (2.0% GDP). 
 
The surplus stemmed from increasing net inflows of direct investment to USD5.3 billion, primarily attributable to the equity capital instruments in line with the promising domestic economic outlook. 
Portfolio investments were maintaining net inflows at USD4,4 billion, slightly decreased from USD4.9 billion recorded in the previous quarter, given the persisting of global financial market uncertainty. 
 
Meanwhile, other investment recorded a deficit, partly induced by rising repayment on maturing foreign loans.      
 
"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 concluded.
 
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