• Chrisna Ludfernando Universitas Diponegoro
  • Edy Yusuf Agung Gunanto Universitas Diponegoro, Indonesia



current account balance; government budget: current account; APBN; ECM


The global crisis has pushed Indonesia into external and internal imbalances. In this case, the current account deficit is one of the important issues related to external balance because it is related to Indonesia's foreign exchange reserves. A crisis causes not only external imbalances but also causes internal imbalances. The Indonesian government uses the State Revenue and Expenditure Budget (APBN) as an instrument in achieving internal balance, but Indonesia implements a deficit budget policy so that with this condition Indonesia experiences a twin deficit. This study aims to analyze the determinants that cause a deficit in the current account balance and government budget. The government budget, exchange rate, economic growth, commodity price index, and trade openness variables are used to analyze the current account balance determinants. Meanwhile, to analyze the determinants of the government's budget, the variables of economic growth, inflation, and interest rates are used. The analytical tool used is the Error Correction Model (ECM). The results showed that the variables of economic growth, commodity price index, and trade openness had a significant negative effect on the current account balance in the long and short term. The government budget variable has a significant positive effect in the short term on the current account balance, while the exchange rate variable has a negative and significant effect on the current account balance in the long term. In the determinants of the government budget, the variable of economic growth has a significant positive effect in the long and short term, while the inflation variable has a significant negative effect in the long and short term. However, the interest rate variable has no significant effect in the long and short term.


Altayligil, Y. B., & Çetrez, M. (2020). Macroeconomic, institutional and financial determinants of current account balances: a panel data assessment. Journal of Economic Structures, 9(1), 1–23.

Anwar, K. (2014). Analisis Dampak Defisit Anggaran Terhadap Ekonomi Makro Indonesia (Tahun 1993-2007). Jejaring Administrasi Publik, 6(2), 588–603.

Arjomand, M., Emami, K., & Salimi, F. (2016). Growth and Productivity; The Role of Budget Deficit in the MENA Selected Countries. Procedia Economics and Finance, 36(16), 345–352.

Baharumshah, A. Z., & Lau, E. (2007). Dynamics of fiscal and current account deficits in Thailand: An empirical investigation. Journal of Economic Studies.

Bhat, J. A., & Sharma, N. K. (2018). The twin-deficit hypothesis: revisiting Indian economy in a nonlinear framework. Journal of Financial Economic Policy.

Bilman, M. E., & Karaoğlan, S. (2020). Does the twin deficit hypothesis hold in the OECD countries under different real interest rate regimes? Journal of Policy Modeling, 42(1), 205–215.

Brissimis, S. N., Hondroyiannis, G., Papazoglou, C., Tsaveas, N. T., & Vasardani, M. A. (2012). Current account determinants and external sustainability in periods of structural change. Economic Change and Restructuring, 45(1–2), 71–95.

Chinn, M. D., & Prasad, E. S. (2003). Medium-term determinants of current accounts in industrial and developing countries: An empirical exploration. Journal of International Economics, 59(1), 47–76.

Das, D. K. (2016). Determinants of current account imbalance in the global economy: a dynamic panel analysis. Journal of Economic Structures, 5(1).

Djiwandono, J. (1980). Perkembangan Teori Neraca Pembayaran. Economics and Finance in Indonesia, 28(3), 303–320.

Gujarati, D. N. (2009). Basic Econometrics (5th ed.). McGraw-Hill.

Handoko, R. (2015). Determinan Neraca Transaksi Berjalan Di Indonesia : Pendekatan Vektor Autoregresif. Kajian Ekonomi Dan Keuangan, 19(2), 139–160.

Haryanto. (2013). Sinkronisasi Kebijakan Fiskal dan Moneter dalam Mengantisipasi Fenomena Desifit Kembar (Twin Defisit). Majalah Indo Spread, 03, 67–79.

Helmy, H. E. (2018). The twin deficit hypothesis in Egypt. Journal of Policy Modeling, 40(2), 328–349.

Herwartz, H., & Siedenburg, F. (2007). Determinants of current account imbalances in 16 OECD countries: An out-of-sample perspective. Review of World Economics, 143(2), 349–374.

Jeremy, O. (2019). Analisis Keterkaitan Instrumen Kebijakan Moneter, Defisit Anggaran, dan Neraca Pembayaran Indonesia Tahun 2002-2017. Universitas Diponegoro.

Lis, E. M., & Nickel, C. (2021). The Impact of Extreme Weather Events on Budget Balances and Implications for Fiscal Policy. SSRN Electronic Journal.

Maltritz, D., & Wüste, S. (2015). Determinants of budget deficits in Europe: The role and relations of fiscal rules, fiscal councils, creative accounting and the Euro. Economic Modelling, 48, 222–236.

Mankiw, N. G. (2010). Macroeconomics (7th Ed). In Worth Publishers.

Mawejje, J., & Odhiambo, N. M. (2020). The determinants of fiscal deficits: a survey of literature. International Review of Economics, 67(3), 403–417.

Nakatani, R. (2018). Adjustment to negative price shocks by a commodity exporting economy: Does exchange rate flexibility resolve a balance of payments crisis? Journal of Asian Economics, 57(June), 13–35.

Nizar, M. A., Kebijakan, P., Makro, E., Fiskal, B. K., & Keuangan-ri, K. (2012). Pengaruh Defisit Anggaran Terhadap Defisit Transaksi Berjalan di Indonesia.

Novi, M., & Perdana, A. (2021). Analisis Fenomena Defisit Anggaran dan Defisit Transaksi Berjalan di Indonesia ( 1990-2019 ). Diponegoro Journal of Economics, 10(1), 1–15.

Pulungan, A. M. (2020). Determinan Neraca Transaksi Berjalan Indonesia. INDEfFWORKING PAPER No. 3, 3.

Rahayu, F. P., Juliprijanto, W., Jalunggono, G., Ekonomi, F., & Tidar, U. (2019). Analisis Pengaruh Indikator Ekonomi Makro Terhadap Keseimbangan Primer di Indonesia Tahun 2000 – 2019.

Ratnah S. (2015). Faktor-Faktor Yang Berpengaruh Terhadap Defisit APBN Indonesia. Journal Economix, 3(2), 1–11.

Sadiku, L., Fetahi-Vehapi, M., Sadiku, M., & Berisha, N. (2015). The Persistence and Determinants of Current Account Deficit of FYROM: An Empirical Analysis. Procedia Economics and Finance, 33(15), 90–102.

Shastri, S. (2019). Re-examining the twin deficit hypothesis for major South Asian economies: Some insights into the transmission mechanism. Indian Growth and Development Review, 12(3), 265–287.

Steiner, A. (2016). Determinants of the Public Budget Balance: The Role of Official Capital Flows. Global Imbalances, Financial Crises, and Central Bank Policies, 71–117.

Sugiyono, F. X. (2002). Neraca Pembayaran.

Tujula, M., & Wolswijk, G. (2007). Budget balances in OECD countries: What makes them change? Empirica, 34(1), 1–14.

Wulansari, F. (2014). Analisis Faktor-Faktor yang Memengaruhi Neraca Transaksi Berjalan : Studi Kasus Indonesia Tahun 1990-2011. Economics Development Analysis Journal, 3(1).