Economists project current account deficit to widen to 2.49 per cent in 2026
Jakarta (ANTARA) - Faisal Rachman, Head of Macroeconomic & Financial Market Research at PermataBank, projects that the current account deficit will widen to 2.49 per cent of GDP in 2026, compared to 0.09 per cent of GDP in 2025.
Foreign exchange reserves are expected to fluctuate within the range of US$143–147 billion by the end of 2026, down from US$156.47 billion at the end of 2025.
“Indonesia’s trade balance is expected to continue facing pressure in 2026, as the government’s growth-oriented agenda drives stronger import demand, while weaker global demand, ongoing geopolitical uncertainty, and trade policies continue to weigh on exports,” Faisal stated in Jakarta on Thursday.
Faisal added that these conditions would contribute to the widening current account deficit, thereby exerting pressure on the foreign exchange reserve position.
Notably, Indonesia’s trade surplus surged from US$0.12 billion in July 202cap to US$3.55 billion in August 2026. However, cumulatively, the trade surplus from January to August 2026 shrank sharply to US$7.25 billion, from US$29.35 billion during the same period last year.
The PermataBank economist team still sees downside risks to Indonesia’s trade balance for the remainder of 2026, amidst solid import growth and a challenging export environment.
Meanwhile, the S&P Global Indonesia Manufacturing PMI rose to 52.4 in September 2026 from 49.8 in August 2026, signalling a return to expansion in manufacturing activity.
Faisal believes that the government’s growth-oriented policies are expected to keep domestic demand strong, supporting higher import growth.
Ongoing geopolitical tensions in the Middle East also increase the risk of rising global oil prices, which could potentially increase the value of oil imports.
Furthermore, the peak of the El Niño phenomenon may increase food import requirements as the government attempts to curb domestic inflationary pressures. Overall, he noted, import growth is expected to remain relatively strong through the remainder of 2026.
On the other hand, Faisal clarified that export growth is expected to continue moderating amidst weaker global demand and ongoing geopolitical and trade policy uncertainties.
Weakening global demand is primarily related to the ongoing economic slowdown in China, given that China is the world’s second-largest economy and one of Indonesia’s primary trading partners.
Geopolitical tensions could also disrupt global trade routes, increasing freight and insurance costs and extending delivery times, thereby weighing on export performance.
Uncertainty regarding trade wars is expected to persist, not only through higher tariffs but also leading to more structural global trade fragmentation, as nations become increasingly inward-looking and access to new export markets becomes more difficult.
According to Faisal, such uncertainty could further disrupt global supply chains and burden Indonesian exports.
“However, rising global energy prices could provide support through export prices. Additionally, although global trade in semiconductors and AI-related chips continues to grow, Indonesia’s limited involvement in these high-value supply chains means the direct benefits to Indonesian exports are likely to remain limited,” Faisal concluded.