REPUBLIKA.CO.ID, JAKARTA -- The increasing trade surplus in the non-oil/gas sector has been one of the contributing factors behind the decline in Indonesia's current account deficit, according to a central bank official.
"Surplus in the non-oil/gas trade account has increased because the non-oil/gas exports have grown positively again (3.8 percent year-on-year), which were boosted by increasing manufacturing exports in line with an increasing demand from the US and Japan," Bank Indonesia's Group Head of Payment Account, Endy Dwi Tjahjono, informed newsmen here on Friday.
He noted that the non-oil/gas exports had also grown since the rupiah exchange rate had been very competitive and due to limited correction in the commodity prices in addition to increasing exports of natural resources ahead of the implementation of the mineral and coal mining law on January.
In the meantime, the non-oil/gas imports dropped by 6.6 percent year-on-year, following moderation in domestic demand, he claimed.
"With regard to the oil/gas trade account, the decline in the deficit was also caused by the drop in the oil/gas imports that happened when the oil/gas exports still recorded a positive growth," he added.
Endy emphasized that amid continuing uncertainty in the global financial markets, capital and financial transactions in the fourth quarter of 2013 had recorded a surplus of US$9.2 billion, which was up from US$5.6 billion reported in the previous quarter.
"The hike in the surplus of capital and financial transactions was mainly driven by increasing withdrawal of private foreign loans and domestic banks' loans abroad, which have partly been placed in several instruments provided by Bank Indonesia," he explained.
Apart from that, an inflow of foreign direct investment also remained strong, although it was lower than that recorded during the previous quarter, due to divestment in several foreign investment companies.
"Besides that, the foreign portfolio investment also showed a positive trend, although it was down due to a decline in investment by non-residents in the domestic share market," he stated.
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