Bank Indonesia (BI) has projected a current account deficit that is 2.5 percent of gross domestic product (GDP) this year from the 2018 estimation of 3 percent.
BI Governor Perry Warjiyo said recently that the bank saw indications that efforts to curb imports had started to bear fruit even though it no significant increase in exports had been seen.
The imposing of higher import tax on 1,147 consumer goods as from September last year had started to significantly lower imports, he said, adding that the policy was expected to further curb imports of consumer goods this year.
The wide current account deficit was partly blamed for the country’s low resistance to global economic uncertainty in 2018, forcing the central bank to spend much of its foreign exchange to stabilize the rupiah.
Perry also said the easing of the trade war between China and the United States would improve global trade.
“The US and Chinese negotiations to ease the trade war is heading in a positive direction. It is expected to boost [Indonesian] exports,” he said as reported by kontan.co.id.
Perry also said more foreign arrivals could be expected this year, which would help narrow the current account deficit, even though Tourist Minister Arief Yahya said Indonesia welcomed only 16 million tourists last year — 1 million fewer than the target.
This year, the country hopes to welcome 20 million foreign arrivals.