India: BI expects current account deficit to be 2.5% of GDP in 2019

  • Bank Indonesia (BI) has projected a current account deficit that is 2.5% of gross domestic product (GDP) in 2019 from the 2018 estimation of 3%.
  • The imposing of higher import tax on 1,147 consumer goods as from Sep 18 had started to significantly lower imports, BI Governor Perry Warjiyo said, adding that the policy was expected to further curb imports of consumer goods in 2019.
  • The wide current account deficit was partly blamed for the country’s low resistance to global economic uncertainty in 2018, forcing the central bank to spend much of its foreign exchange to stabilize the IDR.
  • “The US and Chinese negotiations to ease the trade war is heading in a positive direction. It is expected to boost [Indonesian] exports,” he said.
  • Perry also said more foreign arrivals could be expected in 2019, which would help narrow the current account deficit, with the country hoping to welcome 20 million foreign arrivals.

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