Indonesia seen again having big trade deficit in Jan

Indonesia’s rupiah bank notes. (Bloomberg pic)

JAKARTA: Indonesia likely suffered another wide trade gap in January even though imports probably contracted for the first time since June 2017, a Reuters poll showed.

January’s deficit will be US$970 million, according to the median forecast of 12 analysts in the poll, just a touch narrower than December’s revised US$1.03 billion gap.

Imports were seen down 1.05% in January from a year earlier, compared to a 1.72% annual increase in December.

Exports in January probably declined 2.54% from a year earlier, the poll showed, which would be a third month of contraction.

Authorities in Southeast Asia’s largest economy issued a series of measures in the second half of 2018 to curb imports and support the rupiah, which was under pressure from capital outflows part of the year. The moves included raising import taxes and hiking interest rates.

However, January’s predicted fall in imports would stem more from a seasonal trend of slower economic activity at the beginning of a year rather than government intervention, according to Juniman, chief economist of Maybank Indonesia.

Jakarta has also announced measures to boost shipments, including by providing cheaper export financing, expediting free trade negotiations and easing documentation rules for automotive exports.

Indonesia’s 2018 trade gap of US$8.5 billion was the widest on record.