Indonesia posts largest trade gap since April

JAKARTA: Indonesia posted its biggest trade deficit in seven months in November, as exports fell more than expected and imports of consumer goods soared ahead of year-end festivities.

November’s trade gap was US$1.33 billion (RM550.6 billion), data from the statistics bureau showed yesterday, the widest since April and much larger than the median forecast of a Reuters poll of a US$130 million deficit.

Southeast Asia’s largest economy had a surplus of US$172.5 million in October.

The trade data is among a host of macroeconomic indicators closely watched by investors and the central bank. Bank Indonesia (BI), which is scheduled to meet later this week to review monetary policy, is seeking to narrow the current account deficit to between 2.5% and 3% of gross domestic productin 2019, from 3% in 2018.

November’s surprisingly large deficit is unlikely to affect BI’s decision this week as the central bank will probably keep interest rates unchanged after the Federal Reserve signalled no change to US interest rates in near future, Wisnu Wardana, Bank Danamon’s economist, said.

Exports in November amounted to US$14.01 billion, down 5.67% on-year, sharper than the poll’s 1.18% estimated fall, due to soft prices of some of Indonesia’s main commodities like coal and rubber.

Imports in November fell 9.24% from a year earlier to US$15.34 billion, compared with an expected drop of 13.32% in the poll. Consumer goods imports rose 16.28% on-year.

Despite November’s data, this year’s deficit still looks set to narrow significantly with the gap in the first 11 months at US$3.1 billion. – Reuters