TheInsiderStories (ADB)
Statistics Indonesia reported the country recorded a trade deficit  US$160million in September as export fell, said the official on Tuesday (10/15) - Photo by ADB

JAKARTA (TheInsiderStories) – Statistics Indonesia reported the country recorded a trade deficit  US$160million in September as export fell, said the official on Tuesday (10/15). Last month, the country posted a trade surplus $85.1 million, swinging from a $940 million gaps in the same month a year earlier.

While, throughout January – September (9M) the trade balance was still overdrawn at $1.95 billion. But this value is better than the deficit in 9M of 2018 which reached $3.8 billion. This deficit originated from the export value of $124.1 billion and imports of $126.1 billion.

The high import from China become the triggered of the biggest trade deficit with worth of $13.9 billion. With Australia a deficit recorded $1.9 billion and Thailand $2.9 billion, he said.

“Our main imports from January to September are still from China 29.34 percent. The main commodities are cellphones and notebooks,” said Statistic Indonesia’ head Suhariyanto at his office, in Jakarta.

Nevertheless, he asserted, Indonesia still experienced a trade surplus with several countries. For an example with the United States (US) $6.9 billion, India $5.4 billion, and the Netherlands $1.6 billion.

In addition to being overdone with China, Indonesia also recorded a trade deficit with Australia of $1.9 billion and Thailand of $2.9 billion. While, import from China, Ukraine when dissected into goods, especially cereals and mechanical aircraft engines. And South Korea rose by $74.80 million but from US dropped by $78.6 million. Japan and Italy also fell.

The agency noted, value of exports in September reached $14.1 billion, or down 5.74 percent compared to September 2018, which amounted to $14.96 billion. Oil and gas exports export declined the most 37.13 percent to $830million, agricultural exports down 12.24 percent to $360 million, processing exports decreased 0.44 percent to $10.85 billion, and mining exports dropped 14.82 percent to $2.06 billion.

Furthermore, imports were recorded at $14.26 billion, up 0.63 percent compared to August, but down 2.41 percent from September 2018. It was due to oil and gas imports which declined 2.36 percent and non-oil imports which rose 1.02 percent.

Suhariyanto revealed, during August – September 2019, commodity prices were observed to be fluctuating. There are several non-oil and gas commodities that experience price increases that affect the value of export-import.

“Indonesian crude prices in August amounted to $57.27 a barrel and up to $60.84 per barrel in September. There are a number of non-oil commodities, nickel, silvee, chocolate, zinc, lead, aluminium copper and gold that experienced an increase in prices that affected the value of export and import,” he explained.

Trade war sentiment, said Suhariyanto, also influenced Indonesia’ export performance. He stated, “The global economic situation is still full of uncertainties, trade wars take place sometimes, but not necessarily, commodity prices fluctuate.”

Suhariyanto rated, the deficit in September will significantly effect to Indonesia’ GDP. Institute of Chartered Accountants in England and Wales (ICAEW) also mentioned that Indonesia’ GDP is expected to decline to 5.0 percent in 2019, from 5.2 percent in 2018, due to a slowdown in net export growth.

According to ICAEW analysis, the symptom of the decline was due to reduced export growth as trade protection became tighter and demand for Chinese imports weakened. In addition, weak global economic activity at the end of 2018 and declining exports, where only Malaysia recorded by positive growth.

“Looking ahead, we expect the risks to the region to be primarily on the downside. A sharper slowdown in Chinese economic growth triggered by worsening confidence, or a renewed escalation in US-China trade tensions, both affect global trade and growth across the region,” said ICAEW Economic Advisor & Oxford Economics Lead Asia’s economist Sian Fenner.

Written by Staff Editor, Email: theinsiderstories@gmail.com