Indonesia’s current account in its BOP registered a higher deficit of USD5bn, or 2% of GDP in 2Q17. Moving forward, we expect the CAD to widen to USD19.4bn or 2% of GDP in 2017, from a deficit of USD16.9bn (- 1.8% of GDP in 2016). This is on expectations of:
1. A smaller surplus in the merchandise trade account due to growing imports;
2. A larger deficit in the services account.
- Financial account recorded a lower surplus. The financial account, meanwhile, recorded lower inflows of +USD5.9bn in 2Q17, from +USD8bn in 1Q17. It stood at +USD7.9bn in 4Q16. This was due to higher other investment deficit, especially due to foreign debt repayment need and the banks anticipation of meeting the temporary liquidity needs in Lebaran's long holiday.
- Surplus in the balance of payments (BOP) declined. As a result, the surplus in BOP remained declined to USD0.7bn in 2Q17, from +USD4.5bn in 1Q17 and 4Q16. (Rizki Fajar)