Indonesia Trade Balance December 2019


Indonesia: Exports bounce back in December; imports continue to decline

January 15, 2020

According to Statistics Indonesia, the country posted a trade deficit of USD 28 million in December, markedly smaller than the USD 470 million deficit expected by market analysts and the USD 1.1 billion deficit a year prior. Over 2019 as a whole, the trade deficit narrowed sharply from USD 8.7 billion to USD 3.2 billion.

The smaller-than-expected shortfall in December was driven largely by a rebound in exports, which recorded the first annual expansion in 14 months (December: +1.3% year-on-year; November: -6.1% yoy) thanks to higher non-energy shipments. In contrast, imports continued to fall (December: -5.6% yoy; November: -9.2% yoy) amid the government’s import substitution policies designed to rein in the current account deficit.

Analysts at Nomura commented that the lower trade deficit: “supports our view that the CAD remains on an improving trajectory. We reiterate our forecast for the CAD to narrow to 2.8% of GDP in 2019 and 2.6% in 2020 from 3% in 2018. This narrowing has been helped in part by import-substitution policies, which have continued to take effect and are in fact being intensified. Beginning in January 2020 the government will implement a B30 biofuel policy, which we think will help reduce fuel imports. That said, we expect the narrowing of the CAD to be only modest.”

In 2020, our panelists see exports and imports expanding slightly amid a more supportive base effect, with imports likely also boosted by infrastructure spending. Our panelists forecast that in 2020 exports will increase 1.2% and imports will rise 1.6%, bringing the trade deficit to USD 2.1 billion. In 2021, FocusEconomics panelists expect exports will expand 9.1%, while imports will rise 10.5%, bringing the trade deficit to USD 4.6 billion.

Author:, Economist

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Indonesia Trade Balance Chart

Indonesia Trade December 2019

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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