Indonesia

September 2008 | Risk Summary

Jumhur Hidayat, the head of the agency in charge of Indonesians working abroad, was quoted on September 8 as saying that the authorities expect remittances from overseas workers to rise by 20% to US$12.0bn in 2008, thanks to improved workers' skills and higher wages. Although his figures contradict Bank Indonesia (BI) figures, which show worker remittances of US$4.83bn in 2007 as a whole, such inflows are undoubtedly rising rapidly. BI's statistics show remittances up 18.8% y-o-y at US$1.42bn in Q108. Rising remittances should continue to support the rupiah, especially in light of news that the current account recorded a deficit of US$1.5bn in Q208 after an estimated surplus of US$2.6bn in Q108.

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