Indonesia's Trade Balance: January-October Deficit Reaches Rp 83 Trillion

The Central Statistics Agency (BPS) released data showing that Indonesia's trade balance in October 2018 recorded a deficit of US$1.82 billion, equivalent to Rp27.3 trillion at an exchange rate of Rp15,000 per US dollar. This contrasts with a surplus of US$344 million in the previous month. As a result, the national trade balance for the January-October 2018 period showed a deficit of US$5.51 billion, equivalent to Rp82.72 trillion, compared to a surplus of US$11.86 billion in the same period of the previous year.

The October 2018 trade deficit marks the seventh consecutive month of deficit and is the second largest deficit this year. High domestic demand and slowing export performance led to Indonesia's trade balance returning to a deficit. For information, imports of raw materials/intermediate goods in the first ten months of this year increased by 22.15% to US$117.44 billion from US$96.15 billion in the previous year. Capital goods imports in the first ten months of 2018 rose by 28.08% to US$24.67 billion, and consumer goods imports increased by 25.71% to US$14.28 billion from the previous year.

The large trade deficit was triggered by the worsening performance of the oil and gas trade balance, which recorded a deficit of US$10.74 billion in the first ten months of this year, compared to a deficit of US$6.6 billion in the same period of the previous year. This situation was exacerbated by the export balance, which recorded a deficit of US$5.22 billion for the January-October 2018 period, compared to a surplus of over US$18 billion in the same period of 2017.