Indonesia: Trade deficit broadens to five-year high in July on surge in imports

Indonesia recorded a trade deficit of USD 2.0 billion in July, contrasting June’s USD 1.7 billion surplus, according to Statistics Indonesia. July’s deficit was substantially larger than the USD 0.3 billion shortfall recorded in the same month last year.

Exports expanded 19.3% over the same month last year, up from June’s revised 11.3% increase (previously reported: +11.5% year-on-year). July’s reading was driven by solid growth in the energy and non-energy sectors. However, import growth continued to outpace export growth. Imports soared 31.6% in July (June: +12.8% yoy, previously reported: +12.7% yoy), substantially above market expectations and reflective of buoyant domestic demand and higher energy prices.

The 12-month moving sum of the trade balance declined from a USD 3.1 billion surplus in June to a USD 1.4 billion surplus in July, a multi-year low.

Indonesia Trade Balance Forecast

FocusEconomics Consensus Forecast panelists see exports and imports expanding 8.7% and 12.0% respectively in 2018, which would bring the trade surplus to USD 7.7 billion. For 2019, the panel sees exports and imports growing 8.2% and 10.9% respectively, with the trade surplus narrowing to USD 3.5 billion.