Narrower Trade Deficit recorded in December 2019 - Bank Sentral Republik Indonesia
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August 04, 2020

No. 22/3/DKom
Indonesia's trade balance recorded a USD0.03 billion deficit in December 2019, retreating significantly from USD1.39 billion the month earlier. The improvement stemmed from a non-oil and gas trade surplus due to declining non-oil and gas imports across all commodity groups coupled with stronger non-oil and gas export performance. Meanwhile, the oil and gas trade deficit also narrowed in the reporting period as a result of increasing oil and gas exports together with stable oil and gas imports. For the year, therefore, Indonesia's trade balance recorded a USD3.20 billion deficit in 2019, considerably lower than the USD8.70 billion deficit recorded the year earlier. Such favourable developments were supported by import substitution policy to control imports against a backdrop of sluggish export performance in line with global economic moderation and sliding international commodity prices.

The non-oil and gas trade balance recorded a USD0.94 billion surplus in December 2019, thereby reversing the USD0.30 billion deficit posted in November 2019. The main contributors to the non-oil and gas trade surplus in December 2019 were declining non-oil and gas imports, such as vehicles and components. In addition, imports of raw materials and capital goods have also declined in the form of electrical machinery and equipment as well as iron and steel. The solid non-oil and gas trade balance was also supported by a surge of non-oil and gas exports, led by animal/vegetable fats and oils; metal ore, crust and dust; as well as clothing and accessories. Cumulatively for the year, therefore, the non-oil and gas trade balance in 2019 recorded a USD6.15 billion surplus, increasing from USD4.00 billion in the previous period.

Meanwhile, the oil and gas trade deficit reduced in December 2019 to USD0.97 billion from USD1.10 billion the month earlier. The gains come amidst an increase of oil and gas exports in the form of refined products, crude oil and gas. On the other hand, stable oil and gas import performance was recorded as declining imports of refined products were offset by a surge of imported crude oil. Cumulatively in 2019, therefore, the oil and gas trade balance recorded a USD9.35 billion deficit, improving from USD12.70 billion in the previous year.

Bank Indonesia is confident that the trade balance developments recorded in December 2019 and throughout the past year of 2019 were positive in terms of strengthening the external resilience of Indonesia's national economy. Moving forward, Bank Indonesia will continue to strengthen policy synergy with the Government and other relevant authorities in order to strengthen external resilience, including the trade balance outlook.

Jakarta, 15th January 2020

Onny Widjanarko
Executive Director



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