Indonesia's 3Q2024 current account deficit narrows to 0.6% of GDP

JAKARTA (Nov 21): Indonesia's current account deficit narrowed to 0.6% of gross domestic product (GDP), or US$2.2 billion (RM9.82 billion) in the third quarter of this year (3Q2024), from 0.9% of GDP in the previous quarter, the central bank said on Thursday.

The narrower deficit was supported by continuous trade surpluses and smaller deficit in the services balance, due to a higher number of foreign visitors, Bank Indonesia (BI) said in a statement.

BI maintained its outlook for the full-year current account deficit to be within 0.1% to 0.9% of GDP this year.

The balance of payments for the third quarter was a surplus of US$5.9 billion, compared with a deficit of about US$600 million in the previous quarter, BI added.

The surplus was due to a low current account deficit and a surplus in the financial and capital transactions balance, contributed by foreign inflows and direct investment into sectors such as manufacturing, health services, transportation, warehousing and communication.

A narrower current account deficit in the third quarter may gives BI scope to resume its easing path going forward, Maybank Indonesia economist Myrdal Gunarto said.

BI held its interest rate unchanged at 6.00% at a policy review on Wednesday, saying it was focused on rupiah stability, as global dynamics have changed following the US election.

It said the changed global environment had limited its capacity to ease policy.

Uploaded by Liza Shireen Koshy