Balance of Payments to Record $7b Surplus in 2017

Bank Indonesia (BI) projects the country’s balance of payments (BoP) will reach a surplus of US$7 billion this year from $12 billion last year.

“We understand that last year there was the tax amnesty [which caused] hefty fund inflows so that the $7 billion figure [this year] is good enough given our sound capital and financial accounts,” BI Governor Agus Martowardojo said on Monday.

Directorate General of Taxation data show that the tax amnesty resulted in Rp 147 trillion ($11 billion) in asset repatriation while the government secured Rp 135 trillion in revenue from penalties.

The BoP records economic transactions between residents and non-residents in a certain period of time. It consists of three key components, namely current account, capital account and financial account.

Indonesia’s BoP stood at a surplus of $700 million in the second quarter supported by a higher surplus in capital and financial transactions compared to the current account deficit (CAD).

The CAD stood at $5 billion or 1.96 percent of gross domestic product (GDP) during the same period, BI data show.

The central bank forecasts the CAD to hover at between 1.5 and 2 percent of GDP this year and from 2 to 2.5 percent in 2018, below the safe limit of 3 percent. (bbn, Prima Wirayani, The Jakarta Post)