Indonesia recorded its biggest ever monthly trade deficit in April, complicating the Southeast Asian country’s battle with a broader economic slowdown and the effects of global trade tensions.
The value of goods shipped from the country to the rest of the world slumped by 13.1 per cent year on year in April, according to Statistics Indonesia figures released on Wednesday. Economists polled by Reuters had forecast a milder fall of 7.2 per cent.
Meanwhile, imports for the month fell by just 6.6 per cent year on year, much less than the Reuters forecast of a 12.1 per cent drop. That combination pushed Southeast Asia’s biggest economy’s monthly trade deficit to $2.5 billion, or its biggest since the country started recording data in the late 1950s. In March, Indonesia posted a slight trade surplus.
The chunky trade deficit “may exert additional pressure on the Indonesian rupiah although the central bank has pledged to support the currency,” economists at ING said prior to the data release. The currency was down 0.1 per cent following the data release.
Indonesia’s government has been trying to maintain a trade surplus with policies intended to limit imports, they added.
The country is a major exporter of commodities such as palm oil and coal, whose prices have fallen this year as global trade unease prompts fears of a slowdown in global GDP growth.
Data published last week showed that Indonesia’s economy expanded at a slower rate than expected in the first quarter, partly as result of its shrinking export sector.
(source: The Financial Times)