REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Sri Mulyani said the country's current account deficit (CAD) should be coped with an increase in exports not by reducing imports. CAD is predicted to reach US$25 billion this year.
"Ideally, CAD is solved by boosting exports not by cutting imports," Sri Mulyani told participants of a seminar on National Exports here on Monday.
Sri Mulyani said increase in exports indicates improved competitiveness and ability to produce goods that do not need to be imported such as tea, coffee, and chocolate, which are produced in the country. She hopes the Indonesia Eximbank could identify factors causing difficulty to produce those commodities in the country.
The minister said Indonesia is currently under pressure of current account deficit making it difficult to increase its economic growth. In two years - 2016 and 2017 - the country's current account deficit reached US$17 billion although the deficit could be offset by surplus of US$29 billion in capital and financial account.
In the first half of 2018, the country's current account deficit already reached US$13.7 billion including US$5.7 billion in the first quarter and US$8 billion in the second quarter of the year.
Exports of goods in the first half of 2018 were valued around US$88.2 billion, but imports were also high at US$85.6 billion. Meanwhile, surplus in capital and financial account reached only US$6.5 billion.
Import control strategy is necessary as there is still risk of higher capital outflow with the U.S. Central Bank planning further increase in its fund rate, Sri Mulyani said.