Indonesia Trade Balance: 2019

2019 Trade Balance a Progress

Extending edge

Indonesia trade balance figure for December 2019 came in at a deficit of USD28.2mn, against market estimates of a deficits c. USD500mn. December figure brought total trade balance of deficit USD3.2bn for the full last year,  against USD8.7bn in 2018, representing meaningful decline in trade deficit of 63% YoY.  Most the improvement came in from lower value of total import in 2019 of  USD170.7bn (-9.5% YoY, 2018:6.7% YoY ), while total export value recorded at USD167.5bn (-6.9% YoY, 2018: 20.3% YoY).

At the other end, last year, oil and gas contributed to  trade deficits of USD9.3bn (2018: USD12.7bn), while non-oil and gas recorded a surplus of USD6.2bn (2018: 4.0bn).

 Much Lower Volume of Oil and Gas Import in 2019

In 2019, import volume of crude oil declined by 30.6% YoY (2018: -5.7% YoY), while import of Refined Oil volume decreased by 12.2% YoY (2018: -1.1% YoY), and import of Gas volume grew by 3.1% YoY (2018: 1.1% YoY). The government strategies to curb oil imports to have included: 1) mandatory selling of crude oil from private contractors to state-owned Pertamina. This optimization of sourcing crude oil domestically had improved domestic lifting to 75%  during first semester this year vs. 63% in the same periode 2018. 2) acceleration of Bio-Fuels consumption for use as alternative fuels to reduce imports. These two main actions seemed to have been effective.

Much hope on stable CPO and coal Prices

 With CPO and coal prices being stable in the positive trend, it is expected that the non-oil and gas sector to contribute higher surplus this year.

Government estimated GDP growth of 5.3% YoY this year

Trade posture this year is critical for the economy growth to deliver sweet surprise.