The current account set a new record this year. For the first time in 42 years, Indonesia’s current account recorded a surplus of US$ 13.22 billion. When compared with the Gross Domestic Product (GDP), the current account this year is equivalent to 1% of GDP. This record is the best since 2009 (1.97% of GDP). In the fourth quarter of 2022, the current account touched US$ 4.27 billion or 1.3% of GDP.
The impressive record for the current account was supported by a surge in exports. The Russo-Ukrainian war that erupted almost a year ago soared energy and food commodity prices. Indonesia also has a windfall due to the soaring prices of coal, crude palm oil (CPO), and nickel. Exports of goods were recorded at US$ 292.55 billion in 2022 while imports were recorded at US$ 229.87 billion. Thus, the goods export-import balance recorded a surplus of US$ 62.68 billion. The amount of this export makes the current account balance fattening.
The current account remained swollen even though the service import-export balance recorded a large deficit of US$ 20.04 billion. This value has increased dramatically compared to 2021 which was recorded at US$ 14.6 billion. The big record in the current account also reaffirms Indonesia’s heavy dependence on commodities.
In Indonesia’s history, only four times has Indonesia been able to record a current account surplus of more than US$ 10 billion, namely in 2006, 2007, 2010, and 2022. When compared to GDP, Indonesia’s current account also recorded a high surplus during the commodity boom (2005-2010). The current account in 2006 was recorded at 2.98% of GDP, in 2007 it was recorded at 2.43%, and in 2009 it was recorded at 1.97% of GDP.
These periods were the times when Indonesia experienced a windfall due to the commodity boom. Preferably, when commodities fall, the current account will fall or be in deficit. An example is from 2013-2019. The average current account has indeed penetrated 4.16% in the 1998-2003 period. However, the high current account is due more to the small imports. The uncertain economic situation after the collapse of the New Order and the beginning of the Reform Era meant that the pace of the economy was not moving fast enough and that imports slumped.
February 20, 2023, CNBC Indonesia
(https://www.cnbcindonesia.com/market/20230220154434-17-415335/soal-ini-jokowi-cetak-rekor-lewati-capaian-5-presiden-ri)