JAKARTA: Indonesian authorities plan to tweak the way state energy firm Pertamina's overseas oil production that is brought back to the country is reported in the balance of payments for more accurate booking, government officials said on Friday.
The proposed change comes after the central bank predicted that Indonesia would miss its current account deficit target for 2019, and could result in it appearing smaller than it does now.
Southeast Asia's largest economy saw its current account deficit balloon last year as imports jumped.
That, along with rising US interest rates and the Sino-US trade war, triggered capital outflows and forced Bank Indonesia (BI) to raise its benchmark rate six times by a total 175 basis points in 2018.
"The government is formulating a way to make Pertamina's crude entitlement from overseas blocks be recorded as incoming foreign exchange instead of imports, to make our records more accurate," Deputy Energy Minister Arcandra Tahar told reporters.
The crude has been until now reported under imported goods in the current account, while Pertamina's earnings from overseas investment have not been recorded properly, Darmin Nasution, coordinating minister for economic affairs, said.
The gap in the current account - which shows an economy's trade in goods and services - in January-March narrowed to $7 billion, or 2.6pc of gross domestic product (GDP), from 3.6pc in the previous three months, data from BI showed.
However, Indonesia had its largest monthly trade deficit in history last month, of $2.5 billion, a sign that the current account gap could swell again in the second quarter.
After the April trade data, BI revised its forecast for the 2019 current account deficit to a range of 2.5pc to 3pc of GDP, from an initial outlook of around 2.5pc .
Pertamina has crude entitlement from its investments in oil fields in Algeria, Malaysia and Iraq.
BI Governor Perry Warjiyo declined to comment on the government's proposal and on why Pertamina's earnings were not included in current account reporting.
Nasution, the coordinating minister, said that it was because the central bank had not received data from Pertamina.
Last year's current account deficit was 3pc of GDP, or $31.1 billion, to which Indonesia's oil and gas trade contributed an $11.6 billion shortfall, according to BI data.
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