Indonesia Trade Balance October 2018


Indonesia: Export growth is limp in October, while imports surge

November 15, 2018

According to Statistics Indonesia, the country recorded a trade deficit of USD 1.8 billion in October, larger than markets had expected and contrasting the USD 1.0 billion surplus registered in the same month last year. October’s trade deficit was the second highest since 2014.

Exports grew a mere 3.6% over the same month last year in October, dragged down by falling crude oil exports, and coming after similarly soft readings in September and August. At the same time, import growth accelerated to 23.7% from 14.2% in September, buoyed by markedly higher hydrocarbon and non-hydrocarbon imports.

There is some disagreement among panelists as to what the October trade figures mean for the current account deficit in the final quarter. According to Joey Cuyegkeng, Senior Economist at ING: “The large October trade deficit portends another large current account deficit in 4Q. We expect the current account deficit in 4Q to be almost as wide as the deficit in 3Q.”

In contrast, analysts at Nomura are more optimistic: “We are revising up our 2018 current account deficit (CAD) forecast […] taking into account the latest outturns. Our forecast nevertheless still suggests a sharp narrowing in Q4 […]. We remain optimistic on an improving CAD outlook, supported by several factors […]. These include government measures to manage import demand, strong seasonality in income payments, an adjustment from the weak currency particularly on the services balance, higher tourism receipts and stabilising terms of trade from lower oil prices.”

Indonesia Trade Balance Forecast

Panelists see exports and imports expanding 7.0% and 6.5% respectively in 2019, which would bring the trade balance to a USD 1.0 billion surplus. For 2020, the panel sees exports and imports growing 6.3% and 6.7% respectively, with the trade surplus at USD 0.3 billion.

Author:, Economist

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Indonesia Trade Balance Chart

Indonesia Trade12m October 2018 2

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: Statistics Indonesia (BPS) and FocusEconomics calculations.

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