Governor of Bank Indonesia Agus Martowardojo said that the January trade deficit was caused by a smaller surplus in the non-oil & gas sector in combination with a higher deficit in the oil & gas sector. The non-oil & gas surplus declined from USD $2.32 billion in December 2013 to USD $0.63 billion in January 2014 due to a 11.6 percent contraction of non-oil & gas exports, while non-oil & gas imports rose 1.13 percent. Indonesia's mineral ore exports plunged over 70 percent in January 2014 from the previous month after implementation of the ban on exports of unprocessed minerals from 12 January 2014. The ban is implemented in the context of the country’s mineral value-added program.

Martowardojo is convinced that Indonesia's trade balance will turn into a surplus again because demand from advanced economies is expected to increase amid an improving global economy. Moreover, in the months ahead, mineral exports are expected to increase. Currently, a number of large mining companies (such as Freeport Indonesia) are engaged in negotiations with the Indonesian government to obtain permission for the continuation of copper concentrate exports (under specific terms and conditions).

Bank Indonesia expects the current account deficit to be curbed below the three percent of GDP mark, which is considered a sustainable level, in 2014. This deficit hit a record high of USD $9.9 billion (or 4.4 percent of GDP) in the second quarter of 2013 and was one of the major concerns of international investors amid the looming end of the Federal Reserve's quantitative program, leading to large capital outflows from Southeast Asia's largest economy. By the end of the year, however, Indonesia's current account deficit had eased markedly. In the fourth quarter of 2013, the deficit was recorded at 1.98 percent of GDP.

Indonesia's Trade Balance 2014 (in billion US Dollar):

2014                              Export                              Import
Month   Oil & Gas   Non Oil & Gas   Total   Oil & Gas
  Non Oil & Gas   Total
January       2,50          11,99   14,48       3,56          11,36   14,92

Indonesia's Trade Balance 2013 (in billion US Dollar):

2013                              Export                              Import
Month   Oil & Gas   Non Oil & Gas   Total   Oil & Gas
  Non Oil & Gas   Total
January       2,66          12,72   15,38       3,97          11,48   15,45
February       2,57          12,45   15,02       3,64          11,67   15,31
March       2,93          12,09   15,02       3,90          10,99   14,89
April       2,45          12,31   14,76       3,63          12,83   16,46
May       2,92          13,21   16,13       3,43          13,23   16,66
June       2,80          11,96   14,76       3,53          12,11   15,64
July       2,28          12,81   15,09       4,14          13,28   17,42
August       2,72          10,36   13,08       3,67           9,34   13,01
September       2,41          12,29   14,70       3,72          11,79   15,51
October       2,72          12,99   15,70       3,47          12,20   15,67
November       2,77          13,17   15,94       3,70          11,21   15,15
December       3,41          13,58   16,98       4,22          11,24   15,46
Jan-Dec      32,63         149,93  182,57       45,27         141,36  186,36

Source: Statistics Indonesia

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