UOB Group’s Economist Enrico Tanuwidjaja and Junior Economist Agus Santoso review the latest current account figures in Indonesia.

Key Takeaways

“Indonesia’s 1Q23 Current Account (CA) position recorded a surplus of USD3bn (0.9% of GDP), though slightly lower than the previous period's surplus of USD4.2bn (1.3% of GDP). The capital and financial account recorded a surplus of USD3.4bn (1% of GDP), a significant increase from a surplus of USD0.3bn (0.1% of GDP) in 4Q22. Overall, Indonesia's balance of payments (BOP) position in 1Q23 remained strong and steady to USD6.5bn, higher than 4Q22’s USD4.7bn.”

“Robust demand from Indonesia's main trading partners underpinned strong exports performance and coupled with deeper imports contraction amid lower global oil prices and a more sluggish capital goods demand as the final phase of several downstream projects kicked in yielded consistent trade surplus, which in turn support CA surplus in 1Q23.”

“We expect Indonesia’s CA position to turn from a surplus of 1% of GDP in 2022 into a slight deficit of around -0.3% in this year. The anticipated global economic slowdown and a more moderate financial account performance are key reasons for our forecast of a slight deficit in CA position for 2023.”