Indonesia's Trade Deficit, Biggest Ever Recorded

In the most recent economic report released Monday (13/5), Indonesia’s trade balance is shown to have experienced a deficit of $2.5 Billion in April. Indonesian exports decreased 13.1 percent year-on-year (y/y) to USD $12.60 billion, while imports into Indonesia fell at a rate of 6.6 percent (y/y) to USD $15.10 billion in April 2019. In other words, both exports and imports fell, but exports fell much more. The figure is the biggest deficit ever recorded since 2013 and the biggest during President Joko Widodo’s administration, surpassing the $2.05 Billion trade deficit in December 2018. The deficit is caused primarily due to the month-to-month decline in oil and gas exports, but a month-to-month increase in oil and gas imports.

As Indonesia faced a trade deficit in April 2019 several things have been affected. Firstly, the Rupiah fell 0,07% to the level of Rp14,435 / Dollar. As Rupiah’s exchange rate is predicted to depreciate further, it is worried that many stocks will be sold by the country’s stock market players. This will lead to a fluctuating instability of the national economy. Another effect is that instruments such as stocks and bonds are also forecasted to turn unattractive for foreign investors. Recent net sales numbers show that foreign investors are more inclined to leave the Indonesian stock market after release of the international trade data for the period of April. Before the report was released, the net sales val