Jakarta, CNBC – Indonesia’s Balance of Payments (BOP) again posted a deficit in the first quarter of 2022. The deficit occurred because many foreign investors chose to flee Indonesia, leaving a big hole in financial transactions.
Bank Indonesia, Friday (20/5/2022), announced that the BOP experienced a deficit of US$ 1.8 billion in January-March 2022. In fact, the current account in the first quarter of 2022 posted a surplus of US$ 221 million, or 0.07%. of Gross Domestic Product (GDP). This surplus is lower than US$ 1.49 billion or 0.47% of GDP.
The surplus in the current account was driven by Indonesia’s high exports. Exports in the first quarter of this year reached US$ 66.77 billion, while imports reached US$ 55.63 billion, resulting in a surplus of US$ 11.14 billion. The surplus is indeed smaller than the fourth quarter of 2021 (US$ 12.43 billion) but much higher than the first quarter of 2021 (US$ 7.63 billion).
The size of the export of goods was able to cover the deficit in the services account. The balance of services recorded a deficit of US$ 4.41 billion, larger than in the fourth quarter of 2021 (US$ 3.98 billion).
Historically, Indonesia has often posted a deficit in the services account. The deficit in the balance often outperforms the large surplus in the balance of exports and imports of goods, causing the current account to post a deficit.
“The service balance deficit has increased in line with the continued improvement in economic activity and the increase in the number of national tourist visits abroad after the easing of policies on interstate travel restrictions and the reopening of the Umrah pilgrimage. On the other hand, the primary income balance deficit has improved, thus sustaining a continued surplus of transactions. running,” said BI in its report.
During the fourth quarter of 2011 to the second quarter of 2020, Indonesia’s current account recorded a deficit. In fact, during that period there were still booming commodity which boosted exports. Conditions for the current account began to change in 2020. In the third quarter of 2020, the current account recorded a surplus due to falling imports in line with the weakening Indonesian economy.
During times when the current account recorded a deficit, financial transactions often posted large surpluses, so that the BOP became a surplus.
In the first quarter of 2020, for example, the current account posted a deficit of US$ 3.37 billion or 0.39% of GDP. Meanwhile, financial transactions recorded a surplus of US$ 5.76 billion. Overall, the BOP posted a surplus of US$ 4.07 billion.