The central bank (Bank Indonesia/BI) said in the second quarter (Q2) of 2023, the current account recorded a narrow deficit as commodity prices fell and the global economy moderated, with domestic demand increasing. Meanwhile, the capital and financial account deficit remains manageable against a backdrop of elevated global financial market uncertainty.
The latest developments in the third quarter (Q3) of 2023 indicate a trade surplus recorded in July 2023 totalling US$1.3 billion. Furthermore, foreign capital inflows to domestic financial markets were maintained, with portfolio investment recording a net inflow of US$0.2 billion on 22nd August 2023 (qtd).
The position of reserve assets at the end of July 2023 remained high at US$137.7 billion, equivalent to 6.2 months of imports or 6.0 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. Looking ahead, BOP performance in 2023 is forecast to remain sound, supported by a manageable current account maintained in the range of a 0.4% surplus to a 0.4% deficit of GDP. In addition, the capital and financial account will be maintained on the back of foreign capital inflows in the form of foreign direct investment (FDI) and portfolio investment in line with positive investor perception concerning the national economic outlook.