JAKARTA (Reuters) - Indonesia, Southeast Asia’s biggest economy, estimated its current-account deficit in the first quarter of the year will be well below 3 percent of gross domestic product, bolstered by recovery in commodity prices, said a senior official at the finance ministry.
The widest measure of the flow of goods, services and money in and out the country is seen at around 2 percent, compared with a deficit of 1.98 percent in the previous quarter and a record of 4.4 percent in the second quarter of 2013.
“In general, we are lucky. Because the February and March, according to my BI colleague, will be a straight (trade) surplus,” Deputy Finance Minister Bambang Brodjonegoro said at the Reuters Summit on Thursday.
The natural resources based country, he added, was boosted by the recent recovery in commodity prices like crude palm oil, coal, processed nickel, as well as stronger manufacturing industry.
The G20 economy has been struggling to push down its current-account deficit to a sustainable level, as imports ramp up to meet demand of its growing middle class consumers.
Between June and November, Bank Indonesia lifted its key reference rate by 175 basis point to calm anxious investors from selling Indonesian assets on growing fears about the country’s ability to fund the economy.
Some analysts and offshore investors then raised concerns on the possibility of better trade performance after the government in January imposed a ban on ore exports.
“The effect of the export ban is on the ore and not on processed minerals (which) can still be exported on export fees,” Brodjonegoro said, adding that the new policy will slash the country’s annual trade value by $5 billion.
The ministry also projected that the consumer price index will rise at a much slower pace in March, against the previous month, due to the start of harvest season.
Bank Indonesia forecast annual inflation will be at around 3.5-5.5 percent this year, easing from 7.75 percent a year ago.
The statistics bureau will announce inflation and trade data on April 1.
(This story is refiled to correct inflation and trade data release to April 1 (NOT 2)
Reporting by Rieka Rahadiana and Randy Fabi; Editing by Ron Popeski