BI: Current Account Deficit Will Drop To 2.2 Pct

Nusa Dua, Bali, Dec 7 (ANTARA) - Bank Indonesia (BI) has expressed optimism that the nation`s current account deficit will drop to 2.2 percent of gross domestic product (GDP) by the end of this year, despite imports hitting a record high of US$17.21 billion in October. "Don`t think the trade deficit will widen the current account deficit, although it appeared to do so this month. But we will stick to our forecast that the current account deficit will reach 2.2 percent of the national GDP. The current figures are not only moderate but also low, so it is still manageable," BI Governor Darmin Nasution said on the sidelines of an international seminar held by the Financial System Stability Coordination Forum (FKSSK) here on Thursday. Earlier, the central bank had predicted that the current account deficit would fall to 2.2 percent by the end of 2012. The current account deficit hit 3.1 percent during the first half of this year, but fell to 2.6 percent in the quarter ending September 2012. Trade deficit reached a record high of US$1.55 billion in October, due to a surge in the import of planes and heavy-duty equipment. Darmin said the current account deficit was "a function of the nation`s high economic growth". "Unfortunately, we do not produce capital goods in the same quantity as intermediate goods, so the import of capital goods is on the rise. Thus, the current account deficit should not be seen as a setback," he added.