According to a Bank Indonesia (BI) report, Indonesia’s balance of payments (BOP) for Q3-2024 recorded a surplus of $5.9 billion, a recovery from a deficit of $0.6 billion in Q2-2024.
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The surplus was driven by improvements in several indicators, one of which is the reduction in the current account deficit to $2.2 billion (0.6 percent of gross domestic product), which is better than the $3.2 billion deficit (0.9 percent of GDP) recorded in Q2-2024.
This positive development was influenced by a decrease in the services account deficit, from $5.1 billion to $4.2 billion, primarily because of an increase in revenue from travel services, with more foreign visitors coming to Indonesia for international events and the summer holiday season.
In addition to the services account performance, the reduction in the current account deficit was also supported by an improvement in the primary income account deficit, which decreased to $8.9 billion from $9.6 billion, because of a decrease in payments for direct investment and portfolio investment income, in line with the business cycle.
Other positive performance indicators include an increase in the secondary income account surplus to $1.6 billion from $1.5 billion, driven by higher government grant receipts and remittances from Indonesian migrant workers (PMI).
Increase in capital and financial account surplus Furthermore, the BOP surplus was also fueled by an increase in the capital and financial account surplus to $6.6 billion (1.8 percent of GDP), up from $3.0 billion (0.9 percent of GDP) in Q2-2024.
This positive development was influenced by a higher surplus in direct investment, which increased to $5.2 billion, driven by substantial foreign equity investment, especially in the processing industry, mining and quarrying sectors, as well as wholesale and retail trade.
Additionally, the increase in portfolio investment surplus to $9.6 billion, derived from the purchase of long-term instruments such as rupiah-denominated government bonds and global government bonds, as well as short-term instruments like Sekuritas Rupiah Bank Indonesia (SRBI), also contributed to the growth in the capital and financial account surplus. ■
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