RI's balance of payments posts $4.2b surplus

RI's balance of payments posts $4.2b surplus

Dow Jones, Jakarta

Underpinned by resilient exports, Indonesia's balance of payments recorded an estimated surplus of US$4.2 billion last year, up from $4.0 billion in 2002, the central bank said.

Gains in the country's current account and capital inflow exceeded expectations last year, despite lingering concern over the impact of the Oct. 2002 Bali bombings on the local economy, Bank Indonesia Governor Burhanuddin Abdullah said in a speech to bankers on Friday evening.

Exports rose to an estimated $62.9 billion last year from $59.2 billion in 2002, which helped drive gains in the current account, he said.

Capital inflows also rose last year, due to the influx of funds to the local capital markets, Burhanuddin said.

He didn't provide estimates for last year's current account or capital inflows.

Indonesia's stock market advanced 62 percent last year, making it the second best performing bourse in the region after Thailand. The Jakarta Stock Exchange's main index recorded a fresh all-time closing high of 753.692 points as improvement in Indonesia's economic and political landscape helped buoy investor confidence.

Offshore debt servicing by local companies last year was lower than expected as companies managed to restructure some of their offshore borrowings, the central bank governor also said.

Indonesia's gross foreign exchange reserves rose to $36.3 billion at the end of 2003 from $32.0 billion a year earlier, he said.

In terms of downside risks, however, the central bank governor warned that the expected increase in global interest rates in the second half of this year may slow portfolio capital inflows into Indonesia.

The continued appreciation of the regional currencies against the U.S. dollar, rising trade protectionism such as the U.S.' Bioterrorism Act, and rising competition from China could also hurt Indonesian non-oil and gas exports, he added.

Separately, an official of the central bank said on Monday that Indonesia's total debt repayment is expected to reach $21.01 billion this year, down from the estimated $28.31 billion in repayment made last year.

However, the official of BI's Foreign Affairs Directorate told Dow Jones Newswires that the actual amount could be very different as some companies might restructure their debts.

The official said the government is likely to pay off $9.02 billion in debt this year, while companies operating in Indonesia would pay off $11.99 billion.

Around $16.24 billion of the total amount would be payment of principal, and the remaining $4.77 billion would be interest, said the official.