JAKARTA: Indonesia posted wider-than-expected trade deficit in December, bringing the gap for 2018 to the largest ever, the statistics bureau said yesterday.

December’s trade deficit was US$1.10bil, in a third consecutive month where the gap was wider than market expectations. A Reuters poll had expected a deficit of US$930mil.

South-East Asia’s largest economy had a deficit of US$8.57bil in 2018, the widest ever, a stark contrast to its US$11.84bil surplus in 2017, Suhariyanto, the statistics bureau chief said.

Last year was challenging because exports had slowed at a time when imports surged due to a recovering domestic economy, said Josua Pardede, an economist with Bank Permata in Jakarta.

This year would probably be equally challenging, Pardede said.

“Global economic growth is stagnating. Growth in our major trading partners such as China, the United States, Japan and Europe is slowing. If we can’t find new destinations for our products, export growth could slow further,” he said, noting that falling oil prices could cool down imports.

Economists also warned the trade data could mean Indonesia’s current account deficit in the final quarter of 2018 was also wider than expected.

Central bank governor Perry Warjiyo has previously said the current account gap in the fourth quarter was expected at more than 3% of gross domestic product, though full-year gap was seen at about 3%. — Reuters

Source: https://www.thestar.com.my/business/business-news/2019/01/16/indonesia-posts-record-trade-gap-in-2018/#E5UOIuiBLvDiHK47.99