- Indonesia recorded the widest Q1 BoP deficits since the pandemic, as the financial account flipped to a deficit of USD 2.30 Bn (-0.68% of GDP) while the capital account deficit widened to USD 2.16 Bn (-0.64% GDP).
- Cash outflows and sell-offs in the SBN market explain the sharp drop in the financial account, which may not improve anytime soon given the still-weak demand for Indonesian financial assets.
- The increasing terms-of-trade index may improve the outlook on Indonesia’s goods exports, but the CA deficit is expected to widen in Q2 2024 given the expectedly higher services imports and dividend payments abroad.
