Indonesia: Indonesia records third consecutive monthly trade deficit in December, exports contract
January 15, 2019
According to Statistics Indonesia, the country recorded a trade deficit of USD 1.1 billion in December, marking the third consecutive month in which the deficit has been wider than market expectations. December’s shortfall was larger than the USD 0.2 billion deficit recorded in the same month of the prior year.
Exports contracted 4.6% year-on-year in December, the second consecutive monthly decline. This came on the back of falling exports of crude oil—amid a significant fall in world oil prices—as well as non-hydrocarbon products. Meanwhile, imports grew a mere 1.2%, the weakest reading in over a year, thanks to a lower oil import bill—Indonesia is both an exporter and an importer of oil.
For 2018 as a whole, the trade deficit was the largest on record, amid solid domestic demand, a weak export performance in the second half of the year and the government’s infrastructure push sucking in imports.
Author: Oliver Reynolds, Economist