Indonesia's Running Transaction Deficit Is Estimated To Widen To 0.87 Percent Of GDP By 2025

JAKARTA - Bank Permata economist Josua Pardede estimates that Indonesia's current account deficit (CAD) will expand moderately to around 0.87 percent of GDP by 2025.

Meanwhile, the estimated deficit is widening when compared to 2024 which recorded a deficit of 0.61 percent of GDP.

"We estimate that CAD Indonesia will expand moderately to around 0.87 percent of GDP by 2025, compared to 0.61 percent of GDP by 2024, but still in a healthy range," he said in his statement, Friday, August 8.

He said that the implementation of the reciprocal rate by the US starting on August 7, 2025 has the potential to suppress Indonesia's export performance as well as widen the current account deficit in the second half of 2025, although it is projected that it is still within control.

In addition, he said that the entry of portfolio capital flows could help maintain the stability of foreign exchange reserves.

Josua said that since the beginning of the year, the Indonesian bond market (SBN) had experienced a flow of net income funds, supported by strong domestic macroeconomic conditions.

Meanwhile in the stock market, growth-oriented government and BI policies also have the potential to attract additional inflows of funds.

In addition, Josua added that the Fed's increased expectations of lower interest rates are expected to drive global sentiment towards risk-on.

"We maintain the projection of Indonesia's foreign exchange reserves in the range of 153 billion US dollars 157 billion by the end of 2025, compared to 155.72 billion US dollars by the end of 2024," he said.

Meanwhile, he said that the rupiah exchange rate is predicted to move in the range of Rp. 16,100' Rp. 16,300 per US dollar by the end of 2025, relatively stable compared to the position of Rp. 16,102 per US dollar at the end of the previous year.