Jakarta. Indonesia's balance of payment surplus shows that Indonesia remains resilient against external shocks, according to the Coordinating Ministry for Economic Affairs.

Bank Indonesia recently reported that Indonesia's balance of payments recorded a $5.9 billion surplus in Q3-2024. The country posted a $600 million deficit in the previous quarter. The government attributed the improved balance to a decrease in the current account deficit to $2.2 billion (0.6 percent of gross domestic product or GDP). This was quite the improvement compared to the $3.2 billion deficit (0.9 percent of GDP) in the second quarter.

"Other factors include the improvement in the Services Account deficit from $5.1 billion to $4.2 billion [...] as more foreign tourists visited Indonesia," the ministry wrote in its press statement.

Indonesia also reported that its primary income account deficit had dropped from $9.6 billion to $8.9 billion. Data showed that the secondary income account surplus had gone up from $1.5 billion to $1.7 billion due to an increase in government grants and transfers from Indonesian migrant workers.

Other factors behind the balance of payment surplus included the capital and financial transaction surplus which had improved from $3 billion in Q2-2024 to $6.6 billion the following quarter. Direct investment surplus had gone up to $5.2 billion, driven by high foreign capital participation in the form of equity, especially in the manufacturing, mining and quarrying, and wholesale and retail trade sectors. Indonesia's portfolio investment surplus also rose to $9.6 billion.

As of end-September, Indonesia reported that its foreign exchange reserves had increased to $149.9 billion. This is equivalent to financing 6.4 months of imports and paying government's debts. It is also above the international standard of 3 months of imports.

The government has come up with some strategies to make sure that Indonesia remain resilient to global pressures, including the strengthening US dollar. As a case in point, Indonesia has pursued local currency transaction mechanisms in its foreign trade to reduce dependence on American dollar.

"The government -- alongside Bank Indonesia -- have established a national local currency transaction task force. We aim to increase the use of local currency transactions by 10 percent in 2024 and 2025," Chief Economic Affairs Minister Airlangga Hartarto was quoted as saying in a recent press statement.

The government also continues to establish economic cooperation in multiple forums to boost foreign direct investment inflows and expand market access for Indonesian goods. For instance, Indonesia has partnered with the Indo-Pacific Economic Framework (IPEF) to create a resilient global supply chain. Indonesia is also in the process of joining the Organization for Economic Cooperation and Development (OECD). An OECD membership is expected to encourage Indonesia to make policy reforms that align with the standards of developed countries. This will make Indonesia a more attractive investment destination for international institutions, according to Airlangga.

Bank Indonesia estimates that the 2024 balance of payments will continue its positive trend with a current account deficit kept between 0.1 percent  and 0.9 percent of GDP.