Indonesia: Trade deficit deteriorates to 20-month record in July
August 15, 2017
Indonesia recorded a trade deficit of USD 271 million in July (July 2016: USD 633 million), its first deficit in 20 months. This surprised the market, which had expected a trade surplus of USD 1.1 billion.
Exports grew 41.1% annually, compared to an 11.7% contraction in June. Imports recorded a similarly eye-watering increase of 54.0%, compared to a 17.4% contraction in June. That the Ramadam and Idul Fitri holidays took place in June this year, rather than July as in 2016, primarily explains the magnitude of this July’s readings. The deficit can be explained by a three-month-high deficit in Indonesia’s oil and gas balance (USD 604 million). Breaking down the readings, exports of oil and gas rose 17.6% annually in July (June: +7.3% year-on-year). Non-oil and gas exports, which constitute 90.1% of the exports share, rose 43.8% (June: -13.7% yoy). Imports of oil and gas, meanwhile, rose by 18.0% (June: -8.8% yoy) and non-oil and gas imports rose by 44.3% (June: -29.9% yoy).
The 12-month moving sum of the trade balance slipped from June’s USD 13.1 billion surplus to USD 12.2 billion in July.
Author: Edward Gardner, Economist