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Indonesia posts largest trade gap in 7 months
JAKARTA: Indonesia posted its biggest trade deficit in seven months in November, as exports fell more than expected and imports of consumer goods soared ahead of year-end festivities.
November’s trade gap was $1.33 billion, data from the statistics bureau showed on Monday, the widest since April and much larger than the median forecast of a Reuters poll of a $130 million deficit.
Southeast Asia’s largest economy had a surplus of $172.5 million in October.
The trade data is among a host of macroeconomic indicators closely watched by investors and the central bank. Bank Indonesia (BI), which is scheduled to meet later this week to review monetary policy, is seeking to narrow the current account deficit to between 2.5% to 3% of GDP in 2019, from 3% in 2018.
November’s surprisingly large deficit is unlikely to affect BI’s decision this week as the central bank will probably keep interest rates unchanged after the Federal Reserve signalled no change to US interest rates in near future, Wisnu Wardana, Bank Danamon’s economist, said.
“Next year will be more challenging for exports, while imports could be falling even more with consumption moderating,” he said. He added that if trade performance does not improve significantly, BI would have to be “more careful with its monetary easing” to keep the rupiah currency stable.
BI has cut its key rates four times since July by a total of 100 basis points to shield domestic economic growth from a global slowdown.
Exports in November amounted to $14.01 billion, down 5.67% on-year, sharper than the poll’s 1.18% estimated fall, due to soft prices of some of Indonesia’s main commodities like coal and rubber.
Imports in November fell 9.24% from a year earlier to $15.34 billion, compared with an expected drop of 13.32% in the poll. Consumer goods imports rose 16.28% on-year.
Despite November’s data, this year’s deficit still looks set to narrow significantly with the gap in the first 11 months at $3.1 billion, compared with last year’s record-high deficit of $8.7 billion.
Closing the trade gap is a main government priority this year. The government has tried to cut imports by increasing the palm mix in biodiesel and raising import taxes. It has also eased export rules and provided financing facilities to exporters to boost shipments.
Source: https://www.bangkokpost.com/business/1817239/indonesia-posts-largest-trade-gap-in-7-months