"The encouraging factor is that demand for oil imports will decline if the government raises the price of subsidized fuel oil," Bank Danamon economist Dian Ayu Yustina said here on Thursday.
She said that the policy will reduce the current account transactions as it would narrow fuel oil price disparity and will indirectly limit consumption of subsidized premium gasoline and diesel oil.
"We can have positive perception on the economic development if the government raises fuel prices," she said.
Apart from that, commodity prices in the global market have also begun to be improving in the second semester of 2013 after declining in the first quarter of this year. This is another factor that will influence the current transaction deficit.
"The export sector is expected to recover in line with the improvement of the global economy," she said.
However, this matter will not yet happen in the second quarter of the year because commodity prices have yet to fully recover. The export sector still faced burdens while capital goods import will slow down that will also affect manufacturing industry.
"This condition will cause the current transaction deficit to not yet fully improve in the second quarter of the year," asserted Ayu.
According to Ayu, pressures in the second quarter will not be too high because capital inflow will enter the country through the issuance of global bonds which will help narrow deficit in the balance of payment.
Overall, the resilience of the fiscal structure could minimize pressures on the current transaction deficit and attracts foreign capital inflow because the economic condition is becoming increasingly stable.
Bank Indonesia (BI/the central bank) recorded the current account deficit in the first quarter of 2013 at 2.4 percent of the GDP, down 3.5 percent of the GDP in the previous quarter.
Improvement in the current transaction deficit was caused by the improvement in the country`s trade balance thanks to a sharp drop in imports, particularly consumers goods while a number of export commodities remained to grow positively.
(SYS/A014/S012)
Editor: Suryanto
Copyright © ANTARA 2013
