Jakarta. Indonesia's current account deficit widened in 2017 as transportation and repatriated payments on foreign investment returns wiped out gains in non-oil and gas trade, according to a statement from Bank Indonesia on Friday (09/02).
The current account, or the broadest record of a country’s trade in international goods and services, as well as in remittances and its investment income, recorded a deficit of $17.29 billion, equal to 1.7 percent of gross domestic product last year. In 2016, the current account deficit was recorded at $16.95 billion, equivalent to 1.8 percent of GDP.
The fourth quarter’s current deficit was at $5.8 billion, equal to 2.2 percent of GDP, higher than the deficit of 1.7 percent of GDP in the previous quarter.
This year, Bank Indonesia projects the current account deficit to be between 2 percent and 2.5 percent of GDP.
Still, the country managed to book $11.6 billion in its balance of payment last year thanks to increasing surplus in capital and financial accounts. That figure was lower than the previous year’s surplus of $12.1 billion, but is still considered large as Indonesia’s balance of payment had a deficit of $1 billion in 2015.
"The capital and financial surplus had an increase compared to the previous year, mainly in direct and portfolio investments, in line with improving perceptions of the domestic economic outlook," Junanto Herdiawan, deputy director at the central bank, said in the statement.
The balance of payment surplus had strengthened foreign exchange reserves to $130.2 billion at the end of December, the highest Indonesia ever recorded in its history.
In the October to December period, Indonesia’s balance of payment surplus dropped to $1 billion, compared to $5.4 billion in the third quarter.