BI Records Indonesia's Payment Balance Deficit In The First Quarter Of 2025

JAKARTA - Bank Indonesia (BI) noted that the performance of the Indonesia Payment Balance (NPI) in the first quarter of 2025 recorded a deficit of US$0.8 billion and the position of foreign exchange reserves at the end of March 2025 was recorded to remain high at US$157.1 billion.

Executive Director of the Communication Department, Ramdan Denny Prakoso, said that the current account deficit remains low amid the slowdown in the global economy.

In addition, he said, capital and financial transactions recorded a controlled deficit amid the increasing uncertainty of global financial markets.

"With these developments, NPI in the first quarter of 2025 recorded a deficit of US$0.8 billion and the position of foreign exchange reserves at the end of March 2025 was recorded to remain high at US$157.1 billion," he explained in his statement, Thursday, May 22.

Denny conveyed that this was equivalent to financing 6.5 months of imports and paying the government's foreign debt, and being above the international adequacy standard of around 3 months of imports.

In addition, current transactions recorded a lower deficit where in the first quarter of 2025, transactions recorded a deficit of 0.2 billion US dollars or 0.1 percent of GDP, lower than the deficit of 1.1 billion US dollars or 0.3 percent of GDP in the fourth quarter of 2024.

Denny conveyed that the trade balance surplus of goods has increased, mainly contributed by the increase in the surplus of non-oil and gas trade balances. Non-oil and gas exports have decreased in line with the slowdown in the global economy and commodity prices.

Meanwhile, non-oil and gas imports fell deeper, especially in the raw and auxiliary material group.

On the other hand, he said that the balance deficit in services was increased due to a decrease in the surplus of travel services (travel) in line with the decrease in the number of foreign tourist visits to Indonesia.

"The primary revenue balance deficit is also increasing, influenced by the increase in payments for portfolio investment returns," he explained.

In addition, Denny said that the performance of capital and financial transactions remains under control amid the increasing uncertainty of global financial markets.

"Investment immediately continues to record a surplus as a reflection of investor's positive perception of the economic outlook and the domestic investment climate that is maintained. Portfolio investment has also increased, mainly influenced by foreign capital inflows in domestic debt securities," he added.

On the other hand, Denny said, other investments noted that the deficit was influenced by a decrease in government and private loan withdrawals as well as an increase in private investment in several foreign financial instruments with these developments, capital and financial transactions in the first quarter of 2025 recorded a deficit of 0.3 billion US dollars.

In the future, Denny said that Bank Indonesia will always pay close attention to the dynamics of the global economy that can affect the prospects for NPI and continue to strengthen the response of policy mixes supported by policy synergies with the Government and related authorities, in order to strengthen the resilience of the external sector.

"The 2025 NPI is predicted to remain healthy, supported by a continuing capital and financial account surplus and a maintained account deficit in the deficit range of 0.5 percent to 1.3 percent of GDP," he said.

Denny conveyed that the surplus of capital and financial transactions supported by foreign capital inflows is in line with investor's positive perception of the domestic economic prospects that remain good and attractive investment returns.