Indonesia: Exports and imports decline in January
February 17, 2020
According to Statistics Indonesia, the country posted a trade deficit of USD 0.9 billion in January, markedly larger than the USD 0.3 billion deficit expected by market analysts but down from the USD 1.1 billion deficit posted in the same month last year.
The larger-than-expected shortfall in January was driven by a 3.7% drop in exports amid low prices for key commodities such as palm oil and coal. Imports also declined, by 4.8% year-on-year, likely due in part to the government’s import substitution policies designed to rein in the current account deficit.
Regarding the impact coronavirus could have on Indonesia’s external sector, analysts at Nomura comment: “We believe the impact from the outbreak of COVID-19 has not yet been reflected in January’s trade figures, suggesting export growth could deteriorate further in the near term. By destination, non-O&G exports to China slowed only moderately to a still decent 22% y-o-y in January from 38% in December.”
Author: Oliver Reynolds, Economist