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JAKARTA (BLOOMBERG) – As foreign funds continue to dump Indonesian stocks and bonds, President Joko Widodo is seeking dollars from tourism and exports to contain the growing current account deficit. Ministers, officials and central bankers, Thursday, July 26, to redouble efforts to attract more foreign visitors to the pristine sandy beaches that dot hundreds of islands across the archipelago. He also asked provincial leaders to accelerate tourism and export – related investments to fill the twin deficits of the current account and trade.
The current account deficit is expected to reach the highest in four years as foreign investors become net sellers. Indonesian bonds and equities sold in emerging markets as US rates rose and the dollar rose.
With three interest rate hikes since mid-May and regular intervention by central banks, Mr. Joko's government
Foreign investors withdrew $ 3.8 billion (5.2 billions of dollars) net of bonds and equities this year, with the rupee losing more than 6% against the dollar, according to the data compiled. Bloomberg.
"There are two problems to solve: the current account deficit and the trade deficit," said Joko at the meeting of provincial chiefs in Jakarta
"If we are We can see a surplus in the account current, then we can relax. "
The current account deficit widens to about $ 25 billion this year, or about 3% of gross domestic product, according to the Bank's governor. Indonesia. Perry Warjiyo. According to central bank data, this would be the highest deficit since 2014.
Southeast Asia's largest economy recorded a trade deficit of $ 1.02 billion in the first half of the year after having recorded a surplus for three consecutive years.
The Bank of Indonesia will work with the government to speed up the licensing process for tourism-related investments, increase the availability of cheap flights, access to airports and promote religious tourism, said Mr. Warjiyo. According to Bisnis Indonesia, Indonesia aims to attract 20 million foreign tourists next year with a potential to generate $ 20 billion in revenue by promoting 10 new foreign tourists. Balis, a strategy that includes the development of infrastructure in Sumatra in the west of the country in Maluku from north to east.
The industry can accelerate economic growth, create jobs, boost small and medium enterprises and reduce poverty, according to Bank Indonesia. According to Mr Warjiyo, the central bank will introduce a number of initiatives to promote tourism next month.
Indonesia plans to extend tax breaks to new investments up to 50 years to attract more investors and improve manufacturing sector Sri Mulyani Indrawati told reporters Thursday. The government has also asked exporters to repatriate the currency to strengthen the nation's current account, said the minister after a meeting between Mr. Joko and exporters
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