Bank of Indonesia

Trade Balance Subject to Global Headwinds in January 2019

Indonesia’s trade balance recorded a USD1.16 billion deficit in January 2019, up slightly from USD1.03 billion the month earlier. The larger deficit was down to an increase in the oil and gas trade deficit stemming from an oil and gas export decline that outpaced the corresponding dip in oil and gas imports. Meanwhile, a relatively stable non-oil and gas trade deficit was maintained as non-oil and gas exports rallied amidst persistently strong non-oil and gas imports.

The oil and gas trade deficit stood at USD0.45 billion in January 2019, ticking upwards from USD0.28. billion the month earlier. The larger deficit originated from a decrease in oil and gas exports from USD1.75 billion in December 2018 to USD1.23 billion in the reporting period, held back by refined products and crude oil in line with lower export volume and sliding oil prices. The oil and gas export decline recorded in January 2019 outpaced the USD0.34 billion (mtm) drop in oil and gas imports to USD1.69 billion, which was again down to refined products and crude oil on falling oil prices.

Trade in Indonesia
Trade in Indonesia

The non-oil and gas trade balance recorded a USD0.70 billion deficit in January 2019, relatively unchanged compared with the USD0.70 billion deficit posted in the previous period as a result of stronger non-oil and gas exports against a backdrop of stable non-oil and gas imports. Non-oil and gas exports stood at USD12.63 billion in the reporting period, surging USD0.05 billion (mtm) on the month earlier, dominated by shipments of motor vehicles and components, electrical machinery and equipment as well as iron and steel. Meanwhile, non-oil and gas imports were maintained at USD13.34 billion due to increasing demand for imports of organic chemicals, plastics and articles of plastic as well as iron and steel. Southeast Asia’s largest economy has been struggling to contain imports in recent months. Some measures, including higher tariffs, have been imposed to curb imports, in a bid to reduce the trade gap and support the rupiah.

Bank Indonesia considers the latest trade balance developments a corollary of ongoing global headwinds and lower commodity prices for Indonesian exports amidst persistently strong domestic demand. Moving forward, Bank Indonesia and the Government will continue to coordinate in order to monitor global and national economic developments and strengthen external sector resilience, including the domestic trade outlook.