Jakarta Indonesia’s balance of payments (BOP) in 2021 was quite resilient amid global pressure caused by the escalation of the pandemic and the US Fed’s tapering, according to the Finance Ministry’s Fiscal Policy Agency (BKF).
“It is quite a crucial achievement since BOP is one of the pillars of our national macroeconomic stability,” BKF Head Febrio Kacaribu said in a statement issued here on Saturday.
The BOP showed a positive performance in 2021 by recording a surplus of US$13.5 billion or 1.13 percent of the gross domestic product (GDP), which was substantially higher than the surplus of US$2.6 billion recorded in 2020, he noted.
Furthermore, Indonesia’s current account balance recorded a surplus of US$3.3 billion or 0.3 percent of the GDP compared to a deficit of US$4.4 billion in 2020, he said.
In addition, the capital and financial account balance surplus rose to US$11.7 billion, or 1 percent of the GDP, in 2021 from US$7.9 billion in 2020, the BKF head.
Meanwhile, direct investment surplus increased to US$16.49 billion in 2021 from US$14.14 billion in 2020 thanks to the domestic economy, which started to recover, he said.
Structural and policy reform to improve Indonesia’s investment climate — such as the issuance of the Tax Regulation Harmonization Law in October 2021 — was able to retain investors’ confidence for investing long term in the country, he added.
Hence, in the fourth quarter of 2021, there was an increase in the direct investment surplus, which reached US$3.4 billion, he said.
“The positive impact of the policy reform is expected to further strengthen the trust of foreign investors to invest in Indonesia,” he added.
However, there is still high uncertainty in global financial markets, in line with the tightening of monetary policies of developed countries, which are likely to affect investment in Indonesia, he said.
Source: Antara News