BI predicts surplus of balance of payment in 2017

Indonesias balance of payment will still enjoy a surplus this year but it will decline to US$3-4 billion from US$12 billion last year, Bank Indonesia Governor Agus Martowardojo has predicted.

The drop will be the result of declining capital and financial account, along with the conclusion of the tax amnesty program on March 31, 2017, reducing the inflow of repatriation fund to the financial market, he said here on Monday night.

“Last year we saw the boost came from the tax amnesty program which has an impact on capital account,” he said.

The projected surplus of the balance of payment at the end of this year will remain the same as the surplus of the balance of payment in the January-March 2017 period which was mostly fueled by capital and financial account at US$7.9 billion, he said.

The balance of payment reflects transactions between the Indonesian population and foreign nationals. The balance of payment includes current account (including goods, services and income) and capital and financial account.

Agus said the declining surplus of the balance of payment is also caused by a deficit of the countrys current account which is projected to reach 1.8-1.9 percent of the national gross domestic product (GDP). The figure is the same as the deficit of the current account in 2016.

Despite the deficit, the current account is still under control. The improving export performance this year is expected to help improve the current account, he said.

In the first quarter of 2017, the current account saw a deficit of US$2.4 billion, accounting for 1 percent of the GDP. The rising deficit of the current account was mostly fueled by the rising deficit of trade balance from oil and gas which reached US$2.1 billion and primary income which saw a deficit of US$7.4 billion.