Economists Estimated That The Transaction Naraca Runs A Deficit Of 0.94 Percent In 2024

Illustration of the rupiah and the dollar (Between)

JAKARTA - Head of Bank Permata economist Josua Pardede revealed that overall in 2024, the current account balance will record a deficit of 0.94 percent of GDP or expand from the deficit in 2023 which is 0.14 percent of GDP.

"We also see that the 2024 NPI will record a deficit. This is indicated by foreign exchange reserves that have dropped significantly from the position at the end of 2023 which amounted to 146 billion US dollars, and indications of a high-for-longer risk that still haunts until near the end of 2024," he told VOI, quoted on Sunday, June 23.

However, Josua said that for the second quarter of 2024, the current account balance deficit will widen by 1.15 percent of gross domestic product (GDP) compared to the first quarter of 2024 at 0.64 percent.

"Although it is wide, it is still relatively low when compared to the average deficit in the period 2012 to 2019 which amounted to 2.5 percent of GDP," he explained.

Although, it is supported by the still surplus of the trade balance even though it is already in a shrinking trend.

"The widening of the deficit is mainly due to seasonal factors, where every second quarter of each year there is an increase in payment of returns from domestic financial instruments to non-residents," he said.

With the deficit expected to widen, Josua conveyed that the Indonesia Payment Balance (NPI) in the second quarter of 2024 is expected to still not improve when compared to the position in the first quarter of 2024.

According to Josua, because the current account deficit tends to widen in the second quarter of 2024, especially from April to May 2024, there will be a significant outflow in the stock market and the state securities market (SBN).

Meanwhile, the position of foreign exchange reserves until May 2024 was also recorded at 139 billion US dollars, lower than the position at the end of the first quarter of 2024 which amounted to 140 billion US dollars.

"Meski demikian, pada Juni 2024 sudah ada perbaikan pada pasar SBN. Kebijakan securitas rupiah Bank Indonesia (SRBI) oleh BI juga masih bisa membantu pencatatan inflow sehingga dapat menjaga NPI kuartal II 2024," jelasnya.

So, with the widening of the current account balance deficit and the balance of financial transactions which is likely to still record outflows, Josua estimates that NPI will still record a deficit.