After having recorded a trade deficit for several months, Indonesia finally posted a USD $20 million trade surplus in October 2014, according to data from the country’s Central Statistics Agency (BPS) released on Monday (01/12). Exports in October amounted to USD $15.35 billion, while imports were recorded at USD $15.33 billion. The improvement in Indonesia’s trade balance was mainly on the back of growth in the country’s non-oil & gas sector exports. This sector saw a surplus of USD $1.13 billion (up from USD $760 million in September).
The oil & gas trade balance, however, showed a USD $1.11 billion deficit. Since late 2011, Indonesia has had to cope with a structural current account deficit, primarily caused by costly oil imports (to meet domestic fuel demand), thus prompting the Indonesian government to raise prices for subsidized fuels in mid-November. Although the country’s current account deficit narrowed to 3.1 percent of gross domestic product (GDP) in the third quarter of 2014 (from 4.27 percent of GDP in the previous quarter), the deficit is still unsustainable and places pressure on the rupiah exchange rate as well as making the country vulnerable to capital outflows in times of global shocks.
Cumulatively, Indonesia’s trade deficit was USD $1.64 billion in the January-October 2014 period (the oil & gas deficit touched USD $10.72 billion, while the non-oil & gas trade surplus amounted to USD $9.08 billion).
In September 2014, the country’s trade deficit amounted to USD $270.3 million, the fifth monthly deficit this year.
Meanwhile, ahead of implementation of the ASEAN Economic Community in late 2015, Indonesia still copes with a trade deficit with the ASEAN region. Suryamin, Head of BPS, said that the country’s trade deficit with ASEAN countries reached USD $1 billion in the first ten months of 2014. Regarding the trade balance with European Union member countries, Indonesia posts a USD $3.46 billion trade surplus in the January-October 2014 period. Suryamin detected an improvement in exports to the EU, implying that economic conditions in the EU have improved.