Although still posting a deficit, Indonesia’s oil & gas trade balance improved due to low global petroleum prices as well as reduced domestic oil consumption brought about by Indonesia’s fuel subsidy reforms.

However, Indonesia’s non-oil & gas trade balance posted a narrowing trade surplus as Indonesian exports contracted 8.0 percent (y/y) primarily due to a steep decline in commodity prices (meanwhile imports contracted 3.7 percent y/y amid Indonesia’s economic slowdown). Bank Indonesia also stated that the current account balance improved due to the declining services trade deficit following the fall in imports of goods, lower spending of resident travellers during visits abroad, and the declining primary income deficit following seasonal patterns.

Indonesia’s capital and financial accounts remained in surplus in Q1-2015 due to foreign capital inflows through portfolio and direct investment. Although foreign investors sold more rupiah denominated securities than they bought in March 2015 amid heightened global uncertainties, foreign portfolio inflows accumulated to USD $8.4 billion in Q1-2015 (much higher than USD $62 million in Q4-2014). Q1-2015 portfolio inflows stemmed from the issuance of global government bonds and from strong foreign buying into rupiah-denominated government securities and domestic stocks in the first two months of 2015. However, the country’s capital and financial account surplus in the first quarter of 2015 (USD $5.9 billion) was lower than the USD $8.9 billion surplus in the preceding quarter mainly due to increased placement of the private sector in deposits abroad and the lower withdrawal of private sector foreign loans.

Indonesia’s overall balance of payments (BOP) in Q1-2015 posted a surplus of USD $1.3 billion, supported by the improving current account and the capital and financial account surpluses.