CURRENT ACCOUNT DEFICIT PREDICTED AT 3.3-3.5 PERCENT OF GDP: BI

Jakarta, Jan 20 (Antara) - Bank Indonesia (BI) predicted that the country's current account deficit would be relatively high at 3.3-3.5 percent of the country's Gross Domestic Product (GDP) in 2015. The deficit is expected to be high as imports especially imports of capital goods would remain high to follow the growing investment, Governor of the central bank Agus Martowardojo said. In the third quarter of 2014, the current account deficit was recorded at US$6.84 billion or 3.07 percent of the GDP. "We can see that there would be deficit still because of imports of capital goods and intermediate products needed for productive activities," Agus said here on Monday. He said , however, he noted improvement with a decline in imports of consumer goods . "We estimate the current account deficit is around 3.3-3.5 percent in the whole year (2015), but in general, the components are encouraging as they are more productive unlike previously which were made up more of consumptive components," he said. He said Bank Indonesia would prevent the deficit from widening as against only around 3 percent in 2014 especially as there are still many risks to deal with . "We must not be deceived by expected improvement in the first quarter," he said, adding condition could change in the following quarters. He said the oil price fall is expected to improve the country's current account balance in 2015. "The positive stimulus would help offset the negative impact of growing imports as a result of the government's program of large scale infrastructure development," he added. In 2014, the country's current account deficit totaled US$6.1 billion or 3 percent of GDP, down from US$10.6 billion in 2013. Improvement recorded in the current account balance in 2014 was attributed to improved performance in the exports of manufactured goods and a decline imports amid weak domestic demand. Meanwhile, the trend in capital and financial account was positive thanks to growing direct and portfolio investment. In the third quarter of 2014 , the current account deficit was recorded at US$6.836 billion , down from US$9.1 billion in Q2 after surging from US$4.2 billion in Q1. (T.SYS/B/A. Saragih/A/O. Tamindael)