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Indonesia sees record-breaking US$2.5b trade deficit in April

Indonesia sees record-breaking US$2.5b trade deficit in April

Indonesia’s April trade balance plunged to a deficit of US$2.5 billion after recording trade surpluses in the previous two months, Statistics Indonesia (BPS) has reported.

The figure is the largest monthly deficit recorded since 2013 and during the administration of President Joko ‘Jokowi’ Widodo, surpassing the $2.05 billion trade deficit in December 2018.

It is a contrast to March and February when Indonesia recorded surpluses of $670 million and $330 million respectively.

Exports dropped 10.8 percent month-to-month (mtm) to $12.6 billion, mainly due to a 35 percent mtm decline in oil and gas exports to $740 million.

Nonoil and gas exports, meanwhile, decreased 8.7 percent mtm to $11.86 billion.

Imports in April increased 12.25 percent mtm to $15.1 billion, caused by a 47 percent mtm increase in oil and gas imports to $2.24 billion.

Nonoil and gas imports increased 7.82 percent mtm to $12.86 billion, driven by a 24.1 percent mtm increase in consumer goods imports, such as frozen meat, boneless bovine, apples, pears and running shoes.

The April deficit brings the year-to-date (ytd) trade balance into minus $2.56 billion. The oil and gas trade balance dealt a blow to the figure with a ytd deficit of $2.77 billion, whereas the nonoil and gas trade recorded $204.7 million in ytd surplus.

“The most effective way to manage the trade balance amid the global economic slowdown is to impose tighter import policies,” BPS head Suhariyanto told reporters on Wednesday. “We hope the balance will recover in the next few months.” (bbn)