New economic policy package expected to improve current account deficit: BI

Jakarta (ANTARA News) – Bank Indonesia has expressed the hope that the recently-launched 15th economic policy package will lower services transaction account deficit and will eventually improve current account deficit.

The current account deficit is facing two main problems — higher service trade balance deficit and primary income balance deficit, Bank Indonesia Governor Agus Martowardojo said here on Friday.

He attributed the higher service transaction account deficit to the transportation sector in which exports are still highly dependent on foreign shipping companies.

In addition, the maritime industry still employs many foreign workers, leading to the outflow of foreign currency abroad, he said.

“The structural problem rests with the service trade balance, with the transportation sector contributing the biggest share. Nearly 80-90 percent of Indonesias exports uses foreign ships and containers,” he said.

“We do not mean that we are anti-foreign. But we must make improvement. We cannot continue to use foreign transport services,” he said.

In the first quarter of 2017, the service trade balance still recorded a deficit of US$1.3 billion, down by nearly US$0.7 billion from US$2 billion in the previous quarter.

The BI governor expressed the hope that the government could implement the 15th economic policy package properly.

Yet, he still predicted the current account deficit will reach 2 percent of the national gross domestic product (GDP) this year.

Source: Antara News