Jakarta. Indonesia’s trade deficit narrowed in August, but the gap was larger than expected as exports growth slowed, government data showed on Monday (17/09), adding to pressure on the rupiah and local stocks.
Southeast Asia’s largest economy reported a trade deficit of $1.02 billion for last month, much bigger than the $680 million gap expected in a Reuters poll.
The country had a revised $2.01 billion trade deficit in July, the largest in five years.
August imports were worth $16.8 billion, up 25 percent from a year earlier, data released by the statistics bureau showed. This compared with expectations of a 27 percent rise in the poll.
Meanwhile, exports growth slowed to 4.2 percent from a year earlier to $15.8 billion in August, compared with the poll forecast of a 10 percent increase.
Imports of consumer goods posted the biggest annual growth last month, while exports of agriculture products fell nearly 21 percent from a year earlier, the data showed, contributing to the slowdown in exports. Higher oil and gas imports also contributed to the deficit, according to the statistics bureau.
The rupiah slipped further after the data came in to trade at 14,885 per dollar, 0.57 percent below Friday’s close. The Indonesian currency traded at 14,880 per dollar before the data.
The rupiah has been trading at 20-year lows after being sucked into an emerging market rout, with selling exacerbated by concern over the country’s ability to plug a yawning current account deficit.
Jakarta’s benchmark stock index also extended falls to trade 1.8 percent lower, while the 10-year bond yield rose to 8.428 percent from 8.382 percent at Monday’s opening.
Finance Minister Sri Mulyani Indrawati announced in August a plan to raise import tariffs on more than 1,000 consumer goods as part of an ongoing battle to rein in the trade gap and support the rupiah, which has been weakened about 9 percent against the dollar so far this year.
The tariffs were not applied in August, but analysts have said importers may have frontloaded overseas purchases ahead of the hikes.
Other efforts by the government to control imports include the mandatory use of biodiesel and delays in infrastructure projects.
These policies may only start showing impact on the trade deficit at the end of the year, said Bank Permata economist Josua Pardede, adding that the current account deficit for 2018 was estimated to be within the range of 2.5 percent to 2.7 percent of gross domestic product. The deficit stood at 1.7 percent in 2017.
Reuters
By : Maikel Jefriando and Nilufar Rizki | on 4:33 PM September 17, 2018
http://jakartaglobe.id/business/indonesias-trade-deficit-narrows-august-larger-expected/