Indonesia posts record trade gap in 2018

JAKARTA — Indonesia posted wider-than-expected trade deficit in December, bringing the gap for 2018 to the largest ever, the statistics bureau said on Tuesday.

December’s trade deficit was $1.10 billion, in a third consecutive month where the gap was wider than market expectations. A Reuters poll had expected a deficit of $930 million.

Southeast Asia’s largest economy had a deficit of $8.57 billion in 2018, the widest ever, a stark contrast to its $11.84 billion surplus in 2017, Kecuk Suhariyanto, the statistics bureau chief said.

Last year was challenging because exports had slowed at a time when imports surged due to a recovering domestic economy, said Josua Pardede, an economist with Bank Permata in Jakarta.

This year would probably be equally challenging, Mr. Pardede said.

“Global economic growth is stagnating. Growth in our major trading partners such as China, the United States, Japan and Europe is slowing. If we can’t find new destinations for our products, export growth could slow further,” he said, noting that falling oil prices could cool down imports.

Economists also warned the trade data could mean Indonesia’s current account deficit in the final quarter of 2018 was also wider than expected.

Central bank Governor Perry Warjiyo has previously said the current account gap in the fourth quarter was expected at more than 3% of gross domestic product, though full-year gap was seen at about 3%.

Authorities issued a slew of measures to control imports last year, including mandating a wider use of biodiesel, raising import tax and delaying big, import-heavy infrastructure projects. —