BI: Indonesia Payment Balance In The First Quarter Of 2024 Stays Guarded

Illustration. (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) said Indonesia's balance of payments (NPI) performance in the first quarter of 2024 was maintained amid increasing global uncertainty. "The current account deficit remains low amid the global economic slowdown conditions. Meanwhile, capital and financial transactions recorded a controlled deficit as the impact of increasing global financial market uncertainty," said Head of the BI Communication Department Erwin Haryono in Jakarta, quoted from Antara, Monday 20 May. With such developments, NPI in the first quarter of 2024 recorded a deficit of 6.0 billion US dollars and the position of foreign exchange reserves at the end of March 2024 recorded a high of 140.4 billion US dollars, or equivalent to the cost of 6.2 months of imports and payment of government foreign debt, as well as being above the standard international adequacy of about 3 months of import. Erwin said transactions run noting a low deficit in the midst of global economic slowdown conditions. In the first quarter of 2024, the running transactions recorded a deficit of 2.2 billion US dollars or 0.6 percent of gross domestic product (GDP), higher than the deficit of 1.1 billion US dollars or 0.3 percent of GDP in the fourth quarter of 2023. Non-oiltry trade balance continued to probe the surplus, although lower than the previous quarter, as a result of a decrease in the performance of non-oilst exports as a result of the decline in the global economic slowdown. On the other hand, the performance of the service balance was improved, supported by an increase in tourism service foreign exchange earnings. Meanwhile, the primary revenue balance deficit was slightly increased by the increasing global rate of interest rates. The performance of capital and financial transactions remained solid, supported by direct investments amid increasing global financial market uncertainty conditions. Investment immediately posted a surplus increase from the previous quarter as a fixed reflection of investor's positive perceptions of economic prospects and domestic investment climates. Meanwhile, portfolio investment recorded deficits, mainly driven by foreign outflows in domestic debt securities as the increase in global financial market uncertainty. Other institutions also noted the deficit affected by the private investment in some foreign financial instruments. With these developments, capital transactions on the third quarter of the I-2024 US deficit recorded a factor of 1.

In the future, 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 close policy synergies with the government and relevant authorities to strengthen the resilience of the external sector. NPI 2024 is predicted to be maintained with transactions running in the low deficit range of 0.1 percent to 0.9 percent of GDP. The balance of capital and financial transactions is predicted to record a surplus in line with the forecast for an increase in foreign capital inflows as global financial market uncertainties and maintained investor positive perceptions of the national economic outlook and attractive investment returns.