26 February 2020 (closed)
USD/IDR (14,234) +216.00 +1.54%
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Jakarta Composite Index (5,688.92) -98.22 -1.70%
The government of Indonesia is concerned that the trade deficit in the oil and gas sector that was posted in the first six months of 2013, will continue in the second half of the year and will also disturb the trade balance in 2014. Indonesia's oil and gas sector posted a deficit in Semester I-2013 of USD $5.82 billion, while the non-oil and gas sector posted an USD $2.51 billion surplus. Minister of Trade Gita Wirjawan believes that Indonesia's trade deficit may reach beyond USD $5 to $6 billion this year.
Wirjawan also expects that the government's decision to increase the prices of subsidized fuels in June 2013 will have a positive impact on the trade balance as the policy change aims to curb domestic fuel consumption (mostly imported), which has grown sharply in recent years.
The decline in Indonesia's oil production in combination with increased domestic demand turned Indonesia into a net oil importer from 2004 onwards, implying that it had to terminate its long-term membership (1962-2008) in the Organization of Petroleum Exporting Countries (OPEC). However, Indonesia targets to re-join the OPEC around 2020; an ambitious target that will require more investments as well as a conducive investment climate in the country's oil sector.
Wirjawan also hopes that prices of other commodities will stabilize on the world market and thus positively impacts on Indonesia's exports. Lastly, he stresses the need for Indonesia to become a value-added products manufacturer.