Economists: Current account deficit of 0.61 percent of GDP in 2023

The current account balance in 2023 is expected to record a controlled deficit

Jakarta (Armfalcon.com) – Bank Mandiri economist Faisal Rachman estimates that Indonesia’s current account will experience a deficit of 0.65 percent of Gross Domestic Product (GDP) in 2023, down from the previous estimate of 1.1 percent of GDP.

“The current account balance in 2023 is expected to record a controlled deficit, so that it will still support external sector stability to a certain degree,” Faisal said in an official statement in Jakarta, Monday.

He estimates that national exports will continue to weaken in the future due to falling commodity prices due to weakening global demand, amidst high inflation and ongoing hikes in central bank benchmark interest rates.

“We are still anticipating a trade balance surplus that tends to shrink, especially in the second half of 2023. However, the trade balance surplus can last longer than anticipated because commodity prices will decline more gradually,” he said.

Commodity prices are expected to decline more gradually, because there is an increase in global demand due to the reopening of the Chinese economy, reduced OPEC+ oil production, production of food commodities which has the potential to decrease due to El Nino, and the global energy crisis that has subsided.

Previously, the Central Statistics Agency (BPS) recorded a trade balance surplus of US$3.94 billion in April 2023 or higher than the US$2.83 billion surplus in the previous month.

Exports were recorded to have decreased by 22.32 percent on an annual basis in April 2023 which was the second export contraction amid weakening commodity prices and the Eid holiday.

At the same time, imports also decreased by 22.32 percent on an annual basis as a result of the Eid holiday and the weakening of the rupiah exchange rate.

Also read: Economists project foreign exchange reserves to reach 155 billion dollars in 2023
Also read: BI: Indonesia’s balance of payments is a surplus in the fourth quarter of 2022

source: www.antaranews.com

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