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[JAKARTA] Indonesia posted its first trade deficit in 12 months in November, highlighting persistently weak demand at home and abroad and the growing impact of slumping prices on economies of the world's major commodity exporters.
Indonesia had a US$346.4 million trade deficit in November, compared with an US$840 million surplus expected in a Reuters poll and a US$1.01 billion surplus in October, the statistics bureau said on Tuesday.
The country had posted trade surpluses 11 months in a row through October as its imports fell faster than exports.
In November, exports fell by a sharper-than-expected 17.58 per cent from a year earlier to US$11.16 billion, the lowest monthly value since November 2009 during the global financial crisis. Economists had expected a drop of 11.35 per cent.
Imports fell 18.03 per cent to US$11.51 billion, compared with expectations for a decline of 19.4 per cent. "In all 22 commodities that we monitor closely, only two were rising on month-to-month basis: cocoa, because its price rose, and fish meal," said Suryamin, the head of the statistics bureau, adding shipments of Indonesia's main commodities such as coal and palm oil were down in November. "This is a bad sign, but it is expected," said Wisnu Wardana, an economist with CIMB Niaga in Jakarta. "Indonesia remains a commodity exporter, it is not yet a big exporter of manufacturing products. So with expectation of flat commodity prices next year, we think exports will still be under pressure next year." President Joko Widodo has announced numerous tax incentives for exporters and provided cheaper loans from Indonesia's export-import bank in an effort to boost exports.
His administration has sought to speed up trade pacts with some countries. Widodo also conveyed Indonesia's intention to join the Trans Pacific Partnership (TPP) during his visit to the US in October.
Indonesia's economic growth rate this year is expected to be the slowest since 2009 on the back of slower growth in exports, investment and consumption.
While trade has been weak this year, the trend has led to a healthier current account deficit.
Before the November trade data, Bank Indonesia said it expected a current account gap of around 2 per cent of gross domestic product (GDP), which falls within the range it describes as "healthy" for the country.
The deficit in 2014 was 2.9 per cent of GDP.
Indonesia's central bank is expected to keep its benchmark policy rate unchanged at 7.50 per cent at its last meeting of the year on Thursday. But many economists believe it will trim rates to 7.25 per cent in the first quarter of 2016.