ASEAN KEY DESTINATIONS
Investment saving balance of payments
Investment has become the savior pushing Indonesia's balance of payments (BoP) into positive territory amid increasing imports and secondary income from abroad.
In the first quarter, Indonesia recorded a US$4.5 billion surplus in the BoP, according to data from Bank Indonesia (BI).
The $7.9 billion surplus in the financial account that came from transactions such as direct investments and portfolio investments has covered the $2.4 billion deficit in the current account, said the head of BI's statistics department, BoP analysis and reporting, Tutuk Setya Hadi Cahyono, in Jakarta over the weekend.
"Our current account is still in a deficit position as oil prices increased amid the decrease of domestic oil lifting. We are an oil and gas net importer," Tutuk said.
Moreover, he added, the lower remittance from Indonesian migrant workers also contributed to the deficit in the current account.
As could be seen in the secondary income transactions that mainly came from Indonesian workers’ remittances, the surplus was down to $800 million from $900 million in the fourth quarter last year. It was likely caused by the enforcement of a moratorium on sending workers abroad.
Direct investments are still in surplus with $2.5 billion, a bit down from the $3.3 billion in the fourth quarter of 2016. However, portfolio investments have a surplus of $6.5 billion, compared to the $300 million deficit in the previous quarter.
"The deficit in portfolio investment transactions was caused by the increase of the US Federal Reserve's Fund Rate, but it already bounced back to the positive in the first quarter," he said.
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