The World Bank foresees Indonesia' s current account deficit to narrow next year due to subdued import and the moderate hike of demand of exports amid recovery of economies in China, the U.S. and Japan.
Ndiame Diop, the bank's economist for Indonesia, said that the international lender assumed the country's current account deficit growth to pick up to 2.6 percent of GDP to 23 billion U.S. dollars next year against this year estimate of 3.5 percent of the GDP to 31 billion U.S. dollars.
"(From) the improvement in global growths in Japan, U.S. and China we expect some support in export coming from the improvement of further growth," Diop told a press conference after the launch of Indonesia economic quarterly report by the bank in coordinating investment board headquarters.
In addition to the growth, the economist said that the impact of ongoing adjustment of rupiah and central bank interest rate, and dampened Indonesia's economic growth as well as some of policies being implementing by the government, have been factored.
The bank has foreseen the country's growth to ease to 5.3 percent next year from this year's growth expectation of 5.6 percent, said Diop.
"That has direct impact on import. Because import is positively correlated with that growth," he said.
To improve the gap, the economist suggested Indonesia not to descent the shipment of products from overseas but ramp up export and secure external funds availability, particularly direct investment from offshore.
"Most of the country's imports comprise capital goods, in which the reduction on them could risk production activity in the country," Diop said.
"The efforts to boost investment climate is crucial to lure investment. Making the regulations in trade rules and logistic become more simple can also boost exports," he said.
The Southeast Asia's largest economy registered a surprise small trade surplus of 50 million U.S. dollars in October after recorded a revised deficit of 810 million U.S. dollars in September, national statistic agency announced.
Indonesia's export in October rose by 2.59 percent to 15.72 billion U.S. dollars on yearly basis, while import was down by 8.9 percent to 15.67 billion U.S. dollars, it said.
Indonesia's export accounts for about 26 percent of GDP, according to trade ministry.
The central bank had aggressively raised interest rate by 1.75 percentage points since early June to shore up rupiah and stem inflation, the bank kept it on hold at 7.50 percent for the second time at the beginning of December.
The authorities have striven to overcome weakening rupiah against the dollar, elevated inflation and slowing offshore capital inflows as the country's export fell while import was up.
The government hiked subsidized-fuel prices by an average of 33 percent on June 22 and loosened exportation of mineral ore in August.
As a result the bank revised up its inflation target this year to 9.0 to 9.8 percent from 3.5 to 4.5 percent previously.
World Bank estimates Indonesia's inflation at 6.1 percent next year./.