BI Predicts Current Account Deficit Not to Exceed 3.5 Percent

Jakarta, MINA — Bank Indonesia (BI) has predicted that the country`s current account deficit will increase in the third quarter this year compared to a quarter earlier but it will not exceed 3.5 percent of the national gross domestic product (GDP).

The third-quarter current account deficit will remain high due to oil and gas trade deficit in July and August, Antara News reported, citing BI Governor Perry Warjiyo here on Friday.

Meanwhile, the impact of the import control policy including the use of biodiesel blended fuel (B20) and the rise in income tax rates for imported goods was felt only in September, he said.

“So, it will be reasonable if the current account deficit in the third quarter of 2018 will stay above 3 percent but will not exceed 3.5 percent of the GDP,” he said.

The second-quarter current account deficit stood at 3 percent of the GDP, up from 2.1 percent in the first quarter, he said.

Despite increasing in the third quarter, he believed the current account deficit will fall in the fourth quarter, along with the significant impact of the import control policy.

“So, we believe the current account deficit will be less than 3 percent of the GDP for all of this year,” he said.

The central bank has predicted the current account deficit will fall to 2.5 percent of the GDP next year.

With the improving current account deficit in the fourth quarter, BI projected the national economic growth will stay within the target range of 5.0-5.4 percent but will stay at the lower limit of the range. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)