Indonesia: Country records another trade deficit in August
According to Statistics Indonesia, the country recorded a trade deficit of USD 1.0 billion in August, contrasting the USD 1.7 billion surplus registered in the same month last year and marking the second consecutive monthly deficit. The deficit, which was larger than markets had expected, was driven by robust domestic demand. As a result, the 12-month moving sum of the trade balance declined from a USD 1.4 billion surplus in July to a USD 1.3 billion deficit in August, an over two-year low.
Exports expanded a mere 4.1% over the same month last year, down from July’s revised 19.7% growth (previously reported: +19.3% yoy). August’s figure was negatively impacted by a sharp fall in agricultural exports and subdued manufacturing exports. In contrast, imports continued to boom, up 24.7% year-on-year (July: +31.7% yoy, previously reported: +31.6% yoy) on soaring oil and gas imports.
Trade data for the first two months of Q3 suggests that the current account deficit—which widened to a multi-year high in the second quarter—is likely to stay elevated, putting downward pressure on the rupiah.