Economist at UOB Group Enrico Tanuwidjaja reviews the latest current account figures in Indonesia.

Key Takeaways

“Indonesia’s 3Q22 CA position recorded a surplus of USD4.4bn (or an equivalent of 1.3% of GDP), higher than 2Q22's USD4bn (1.2% of GDP). However, the capital and financial account recorded a deficit of USD6.1bn (1.8% of GDP), increasing by more than five-fold from a deficit of USD1.2bn (0.3% of GDP) in 2Q22. Overall, Indonesia's balance of payments (BOP) position in 3Q22 remained generally resilient with a slight deficit of USD1.3bn.”

“Strong demand for exports from Indonesia’s key trading partners and high global commodity prices have resulted into a much-improved goods trade performance which has in turn underpinned an even stronger surplus in CA position in the last quarter. The performance of the capital and financial account in 3Q22 was supported by direct investment despite increasing uncertainty on global financial markets.”

“We expect Indonesia to record a CA surplus amounting to 0.8% of GDP in 2022 before waning commodity prices, higher imports, higher services deficit, and higher primary deficit turn the CA position into a deficit of circa 0.5% of GDP in 2023.”