Jakarta, 13th May, 2016 (WAM) – Bank Indonesia reported the country’s current account deficit narrowed to US$4.7 billion or 2.1 percent of its gross domestic products (GDP) in the first quarter of this year from US$5.1 billion or 2.4 percent of the GDP in the previous three months period.

The central bank attributed the improvement in current account performance to growing surplus of US$3.2 billion in the trade of commodities other than oil and gas.

The surplus in the trade of commodities other thzn oil and gas had been caused mainly by 5.3 percent decline quarter to quarter in imports, Executive Director of Communications Department of the central bank Tirta Segara said here on Friday as quoted by ANTARA News.

Exports of commodities other than oil and gas also shrank by 2.6 percent but steeper decline was recorded in imports.

The deficit was smaller down to US$607 million in the oil and gas trade mainly on shrinking imports.

Smaller deficit in service account and lower spending by Indonesian tourists abroad also contributed to improvement in current account performance.

The service account deficit dropped to US$1.1 billion in the first quarter of 2016 from US$1.7 billion in the last quarter of 2015.

Capital and financial account left a surplus of US$4.2 billion driven by recovery process of domestic economy and relaxation of monetary policy adopted by advanced economies, Rirta said.

“Mainly thanks to inflows of portfolio investment capital and direct investment,” he said, adding inflows of portfolio investment capital reached US$4.4 billion.

Surplus in direct investment reached US$2.2 billion though declining from US$2.8 billion in the last quarter of 2015.

However, the surplus in capital and financial account was lower than US$9.8 billion in the last quarter of 2015.

Altogether the country’s balance of payment left a deficit of US$287 million in the first three months of 2016 on shrinking surplus in capital and financial account.

“Bank Indonesia is optimistic the countrys balance of payment would improve in the coming months thanks to monetary and macro prudential policy and improvement in the government policy coordination in accelerating structural reform including implementation of government policy packages aimed at improving investment climate and economic competitiveness,” Tirta said.

WAM/tfaham