Indonesia’s current account deficit widened sharply in 2Q26, reaching US$12.5bn or 3.34% of GDP, from US$3.6bn in 1Q26. However, we think the composition of the widening matters more than the headline number. The pressure was mainly driven by higher oil and gas imports and concentrated dividend payments in 2Q, rather than a broad-based deterioration in Indonesia’s external position.

The goods trade surplus fell to just US$1.3bn, with most of the decline coming from the oil and gas deficit, which reached US$10.2bn. Meanwhile, the primary income deficit widened to US$9.7bn as dividend outflows increased. Both factors are relatively sensitive to energy prices and seasonal flows, suggesting that the 2Q26 deterioration may not persist into the coming quarters.
 

This makes 3Q26 more important to watch. The end of the dividend payment season, potentially lower oil prices, and firmer coal and CPO prices could help the external balance improve. Our economist expects the CAD to narrow to 1.1–1.5% of GDP. If this materializes, concerns around Indonesia’s external vulnerability could start to ease.

The implication could extend beyond the current account. A narrower CAD would reduce pressure on the rupiah and potentially give BI more room to respond to domestic growth conditions. For the market, the key takeaway is therefore less about how large the 2Q26 deficit was, and more about whether the external pressure can begin to normalize in 3Q26.