JAKARTA (TheInsiderStories) – Indonesia posted the worse trade deficit in the country’ history. Previously, the deepest deficit of US$2.3 billion occurred in July 2013.
Statistic Indonesia reported today (05/15), the nation posted trade deficit of $2.5 billion in April. Last month, the country only export $12.6 billion, or down 13.1 percent compared April 2018. Even import dropped 6.58 percent to $15.10 billion, could not helped to reduce the trade deficit.
In details, the bureau reported, export of oil and gas down 37.06 percent to $740 million compared to last year (YoY). Then agriculture worth of $250 million or down 15.88 percent (YoY), processing $9.42 billion or dropped 11.82 percent (YoY) and mining and others $2.19 billion or lowered 6.5 percent (YoY)
While, oil and gas imports were recorded $ 2.24 billion and non-oil and gas imports $12.86 billion. Followed by, import of consumption $1.42 billion or down 5.37 percent (YoY), raw materials: $11.33 billion or lowered 6.28 percent (YoY), and capital goods $2.35 billion or down 8.68 percent (YoY).
In the first-four months of 2019, Indonesia imported US$55.77 billion goods. Even though the export from January to April fell 9.39 percent to US$53.2 billion, compared to the same period last year, the amount was not big enough to reach trade balance surplus.
The trade balance hit poorly in April, by having $2.5 billion deficit alone, as announce by Statistics Agency. While in the previous months, Indonesia recorded trade balance surplus. In March, Indonesia still recorded $540.2 million surplus.
Last month, Indonesian exports fell from $14.12 billion to US$12.6 billion.
Indonesia Statistics Chief Suhariyanto said, the downturn was caused by the decreasing price of coal, tin, nickel and iron ore. Indonesian mining export itself declined by 7.31 percent. Then, the non-oil and gas exports dropped by 34.95 percent.
Other export, such as agriculture is also under pressure due to the palm oil’s weakening price and slowdown rubber production. The agriculture products export slumped by 6.74 percent.
But according to Suhariyanto, agriculture export fall is seasonal.
The imports, on the opposite, moved higher by 12.25 percent to $15.1 billion in April. Almost all categories recorded higher amount of imports. Consumption goods spiked by 24.12 percent ahead of Ramadan. Furthermore, raw material and capital goods hiked by 12.09 percent and 6.78 percent respectively.
Suhariyanto explained that both of oil and gas and non-oil and gas sectors had higher imports. The oil and gas import rocketed by 46.99 percent, while the non-oil and gas hiked by 7.82 percent.
He said that there are many challenges during April. Price hike, economic slowdown, fluctuated price of commodities, and geopolitics condition are some factors impacted the export decline.
“It needs to be anticipated due to global trade challenges will be more complicated,” he realized.
To slash the non-oil and gas import, Indonesian government just decided to suspended diesel and aviation turbine fuel, in order to slash trade balance deficit condition.
So far, Indonesia must identified improving performance of export-oriented industries as one of their main goals in coming years to improve the trade deficit. And also, the policies that have been made are not able to overcome this problem.
By Linda Silaen, Email: firstname.lastname@example.org