Indonesia booked a current account surplus for the first time in a decade in 2021, data showed on Friday, but its balance of payments came under pressure in the final quarter due to bond market outflows, as well as higher imports and freight costs.
The central bank data showed Southeast Asia's largest economy recorded a $3.3 billion current account surplus for the whole of 2021, equivalent to 0.3% of gross domestic product, helped by a boom in commodity prices and strong demand from trade partners. It was Indonesia's first such surplus since 2011.
The 2021 balance of payments registered a $13.5 billion surplus.
Indonesia's persistent current account deficits and reliance on foreign portfolio inflows to fund them were among the main contributors to the volatility of the rupiah currency in the past.
Economists have said last year's current account surplus should help anchor the currency this year as major economies prepare to tighten global liquidity amid high inflation.
However, signs of an acceleration in the U.S. Federal Reserve's monetary tightening plans had already spurred outflows from the bond market, Bank Indonesia's data showed, squeezing the capital and financial accounts in the fourth quarter.
The current account surplus also narrowed to $1.42 billion, or 0.4% of GDP, in the fourth quarter, from a $4.97 billion surplus, or 1.7% of GDP, in the previous three months, on rising imports and freight costs.
The fourth-quarter saw an $844 million balance of payments deficit, compared with the July-September quarter's $10.69 billion surplus.
BI policymakers have said Indonesia will likely see its current account swing back to a deficit within a range of 1.1% to 1.9% of GDP in 2022, on moderating commodity prices and rising domestic demand as the economic recovery from the COVID-19 pandemic strengthens.
(Reporting by Gayatri Suroyo; Editing by Ed Davies)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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