Nothing to worry about current account deficit: Coordinating Economic Minister
The Jakarta Post | December 24, 2018- Coordinating Economic Minister Darmin Nasution said on Friday that the current account deficit would reach 3 percent of gross domestic product (GDP) by the end of 2018, but stressed that there was nothing to worry about.
“Yes, it is a bit high, but nothing to worry about. The deficit in 2014 was even higher,” said Darmin in Jakarta on Friday as quoted by kontan.co.id.
According to Bank Indonesia’s data, the current account deficit in 2014 was recorded at US$27.5 billion or 3.09 percent of GDP, while at the end of the third quarter the deficit was estimated to have stood at 2.86 percent of GDP.
Darmin stressed that there was no need to worry because Indonesia had posted a “high enough surplus” in capital and financial transactions.
He did not mention any figure, but according to BI capital and financial transactions stood at $4.2 billion as of the end of the third quarter.
“Don’t look at the current account as a stand-alone factor. Look also at capital and financial transactions. We have a high enough surplus,” he added.
On Monday, Statistics Indonesia announced that November’s trade deficit stood at $2.05 billion, surpassing July’s $2.03 billion trade deficit, which was then the highest deficit in the last five years.
Previously, asset management company Samuel Aset Manajemen economist Lana Soelistianingsih estimated the current account deficit would reach between 3.2 and 3.3 percent by the end of 2018. She described the situation as worrying.
Meanwhile, senior economist Faisal Basri called on the government to take the swelling trade and current account deficit as a serious matter because it could negatively affect the rupiah and the country’s resistance to external pressures. (bbn)