Indonesia: Current Account surplus likely in 2021 – UOB

According to Economist Enrico Tanuwidjaja at UOB Group, Indonesia is likely to clinch a current account surplus this year.
Key Takeaways
“Indonesia’s current account balance reversed into a surplus of USD 4.5bn (1.5% of GDP), after posting a deficit of USD 2.2bn (-0.7% of GDP). As such, Indonesia’s also posted a balance of payment (BOP) surplus of USD 10.7bn in 3Q21, after a deficit of USD 0.4bn in 2Q21.”
“Indonesia’s trade balance hit a record high in October and reached USD5.7bn vs. USD4.4bn in the previous month, amidst faster pace of imports, notably for raw-auxiliary goods. Imports jumped to 51.1% y/y in October vs. 40.3% y/y in September. Meanwhile, exports rose 53.4% y/y in October vs. 47.6% y/y in September.”
“The capital and financial account (which records trade in assets between Indonesians and foreign counterparts) posted a larger surplus of USD6.1bn in 3Q21 (2.0% of GDP).”
“Portfolio investments maintained net inflows of USD 1.1bn, slightly lower than USD 4.4bn in the previous quarter in line with global uncertainty due to the spread of virus Covid-19 new variant in several countries.”
“For the first time ever since the past decade, in 2021 we expect Indonesia to record a current account surplus and reversed the persistent deficit position from several years in a row since the commodity bust back in late 2011-early 2012. We forecast Indonesia CA to record a surplus of 0.2% of GDP, primarily underpinned by the growth in exports.”
Author

Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

















