Indonesia suffers $200m BoP deficit in fiscal first half
Indonesia suffers $200m BoP deficit in fiscal first half
JAKARTA (JP): Indonesia suffered a deficit of more than US$200
million in its balance of payments (BoP) in the first six months
of the 1996/1997 fiscal year, beginning April.
Minister of Finance Mar'ie Muhammad reported to the House of
Representatives' Budgetary Commission yesterday that Indonesia
recorded a $4.52 billion current account deficit for the April-
September period.
Indonesia had a $4.3 billion surplus in its capital account
for the same period and, therefore, a $220 million balance of
payments deficit.
Mar'ie said the current account deficit was attributed to a
US$6.65 billion services deficit, with a $2.55 billion deficit in
freight services and $1.39 billion deficit in government debt
services.
The country's merchandise trade surplus dropped to $2.13
billion, down from $2.24 billion for the same period last year.
The trade surplus was, of course, far short of the $6.65 billion
deficit in services.
"Thus, our current account deficit expanded because our
surplus in trade could not balance the deficits in services,"
Mar'ie said.
The government has tried to reduce the current account deficit
with programs to boost non-oil exports and empower local service
industries, Mar'ie said.
He said the government's export strategy team had identified
Indonesia's 22 largest export destination countries, which absorb
about 90 percent its exports.
Indonesia suffered a non-oil trade deficit of $8.67 billion
last year with 11 of the 22 countries.
The 11 countries are Australia, Canada, France, Germany,
India, Italy, Japan, South Korea, Taiwan, Thailand and the United
States.
Mar'ie said the team was formulating strategies to reduce
trade deficits with four trading partners, the United States,
Japan, Germany and Thailand.
On the capital account, Mar'ie said, the April-September
surplus was mostly attributed to the $4.7 billion net flow of
private funds, of which $2.4 billion came from foreign direct
investment.
But the flow of official funds (government funds) for the
period was $400 million in deficit, Mar'ie said.
He projected the flow of official funds would turn into a $700
million surplus for the second half of the current fiscal year,
between October 1996 and March 1997.
Official fund inflows -- mainly government offshore borrowings
-- are expected to reach $3.3 billion in the second half of the
fiscal year, while official fund outflows -- mainly government
debt service payments -- are expected to reach $2.6 billion.
Mar'ie forecast the flow of private funds would also be
positive. Indonesia is expected to enjoy a net inflow of $5.7
billion in private funds in the second half, of which $3.8
billion would come from foreign direct investment. (rid)