Indonesia's Balance of Payments (BoP) remained stable in the second quarter of 2025, according to Bank Indonesia.

Despite high global financial market uncertainty and the moderation of global economic growth, the BoP recorded a deficit of USD 6.7 billion.

Meanwhile, the country's foreign exchange reserves stayed high at USD 152.6 billion, equivalent to 6.1 months of imports and government external debt servicing, well above the international adequacy standard of three months of imports.

Current Account Deficit Rises, Yet Remains Manageable

The current account posted a deficit of USD 3.0 billion, or 0.8% of GDP, in Q2 2025. This marks an increase from USD 0.2 billion (0.1% of GDP) in the first quarter.

The non-oil and gas trade surplus was sustained, although lower than the previous period, reflecting weaker global economic activity and slowing commodity prices.

On the other hand, the oil and gas trade deficit narrowed, in line with declining global oil prices.

The primary income account deficit widened due to increased payments of dividends and interest, consistent with quarterly trends.

The secondary income account surplus improved, driven by rising grants and remittances from Indonesian migrant workers abroad.

Capital and Financial Account Deficit Reflects Global Market Pressures

In the second quarter of 2025, the capital and financial account recorded a USD 5.2 billion deficit.

Direct investment posted a larger surplus compared to the previous quarter, indicating continued investor confidence supported by the domestic economic outlook and investment environment.

Portfolio investment experienced a deficit, mainly due to foreign capital outflows from domestic debt securities.

Other investments showed a surplus, influenced by withdrawals of private sector foreign loans.

Foreign Exchange Reserves Remain High

At the end of June 2025, Indonesia's reserve assets stood at USD 152.6 billion. This amount is sufficient to finance 6.1 months of imports and government external debt payments.

The level of reserves remains well above international standards, reinforcing the country’s external sector resilience.

Bank Indonesia to Monitor Global Trends and Enhance Policy Synergy

Bank Indonesia will continue to observe global economic dynamics that may affect the BoP outlook.

The central bank stated it would strengthen its policy mix and maintain coordination with the Government and relevant authorities to support the stability of the external sector.

Bank Indonesia expects the BoP performance in 2025 to remain solid, with a manageable current account deficit projected in the range of 0.5% to 1.3% of GDP.

The capital and financial account is expected to record a surplus, supported by foreign capital inflows and positive investor sentiment toward Indonesia’s economic prospects and financial asset yields.

PHOTO: FREEPIK

This article was created with AI assistance.