BI Forecasts Narrower Balance Of Payments Surplus

Bank Indonesia Wednesday said it forecasts Indonesia's balance of payments to be in a surplus range of $19.7 billion to $22.3 billion at the end of 2011, narrower than the $30.3 billion chalked up last year.
The country will likely post a current account of $3.8 billion to $4.7 billion this year compared with $6.3 billion in 2010 partly due to increased imports, the central bank said in a document.
“Export growth is expected to remain positive amid high economic growth in main trading partners such as China and India and due to increasing commodity prices...On the other hand, accelerating domestic demand will significantly drive imports, and in turn also increase services for the transport of goods,“ the central bank said.
Bank Indonesia said portfolio investments will likely remain robust, forecasting a range of $10.8 billion to $12.3 billion worth in 2011 from $15.2 billion last year.
“Ample global liquidity and relatively high gains on rupiah-denominated assets will continue to attract foreign funds, although on a smaller scale compared with 2010,“ Bank Indonesia added.


A surplus in the balance of payments will contribute positively to the country's foreign exchange reserves, which the central bank estimates to reach $116.8 billion to $119.4 billion by the end of the year, an increase of more than 20% from $96.2 billion at the end of 2010. Indonesia's foreign exchange reserves stood at $105.7 billion as of the end of March.
The central bank estimates Indonesia's economy to grow 6.0% to 6.5% this year, compared with 6.1% in 2010. Separately, Sugeng, head of the BI's monetary policy office, said Wednesday that economic growth this year will likely come in at the upper end of the range.