World Bank Predicts Indonesia Will Again Experience a Current Account Deficit
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The World Bank predicts Indonesia will again experience a current account deficit against its Gross Domestic Product (GDP). Indonesia needs to be cautious as the current account deficit is expected to widen again until 2024.
In 2021, the World Bank estimated Indonesia recorded a current account surplus. Indonesia's current account surplus was estimated at 0.2% of GDP last year.
However, Indonesia is projected to experience a current account deficit of 1.2% of GDP in 2022. This deficit is expected to increase to 1.6% in 2023 and widen further to 1.9% in 2024.
During the 2020 pandemic, Indonesia experienced a current account deficit of 0.4% of GDP. This deficit narrowed from 2.7% of GDP the previous year.
The decrease in the current account deficit was driven by strong external demand and commodity prices. In addition, import demand was lower. Therefore, external financing needs decreased from 14% of GDP in 2019 to 10.9% in 2020. This figure is also significantly lower than 11.5% of GDP in 2012, which was the period of the 2013 Taper Tantrum.
"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."
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