Minister predicts high CAD in third quarter

Jakarta (ANTARA News) - Coordinating Minister for Economic Affairs Darmin Nasution predicts that the current account deficit (CAD) in the third quarter of 2018 will widen compared to that in the previous quarter.

"It seems that based on the estimate the CAD will be higher than that in the second quarter. Why? Because indeed our economic growth is high so imports continue to be made," Nasution said when met at his office in Jakarta on Friday.

In addition, continued Nasution, trade wars between the US and China and a number of other countries also affected export performance so that the current account balance was increasingly depressed.

"India has a high import duty on CPO, our exports to the US have slowed down a little and there are other factors. This is part of the process," Naustion said.

According to Nasution, the current account deficit in the third quarter of 2018 has the potential to reach more than 3 percent of GDP, or the safe limit of the deficit amount. However, he considered this as not to be too worrying.

"It is likely to be above three percent, but yes it is not something to worry about. Especially now capital inflows are coming in after the Rupiah strengthens," the minister said.

Based on data from Bank Indonesia (BI), the current account deficit in the second quarter of 2018 was recorded at eight billion US dollars or 3.04 percent of gross domestic product (GDP) or higher than the previous quarters deficit of 5.7 billion US dollars or 2.21 percent of GDP?

Although in the second quarter the current account deficit has reached the maximum limit that is considered safe, namely three percent, yet if calculated per semester I 2018, the current account deficit only reaches 2.6 percent of GDP.

Source: ANTARA News

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