Indonesia posts smaller current account deficit in Q3 as export demand picks up

JAKARTA : Indonesia posted a third quarter current account deficit of $0.9 billion, equivalent to 0.2 per cent of gross domestic product, the central bank said on Tuesday, much smaller than the previous three months owing to recovering demand in some export commodities.

The reduced deficit came after Southeast Asia’s largest economy reported $2.2 billion current account deficit in the second quarter, equivalent to 0.6 per cent of GDP, which was the first quarterly deficit in two years, according to revised data from Bank Indonesia (BI).

Indonesia’s monthly trade surpluses have been declining in value this year as prices of its top commodities like coal and palm oil weakened compared to a year ago.

BI said the smaller third-quarter current account deficit was supported by recovering trade of goods as demand for steel and iron increased amid weakening global commodity prices.

The deficit in services also decreased in the third quarter as the tourism sector showed recovery post-pandemic, BI added.

Its balance of payments stood at a $1.5 billion deficit in the July-September quarter versus a deficit of $7.4 billion in the previous three months.

BI has forecast this year’s current account to be between a surplus of 0.4 per cent and a deficit of 0.4 per cent.