Trade Balance Indonesia: Unexpected Deficit in December 2017
In the last month of 2017 Indonesia posted a USD $270 million trade deficit according to the latest data from Statistics Indonesia (BPS). This result goes against the prediction of most analysts, who expected to see another trade surplus for Southeast Asia's largest economy. Indonesia posted a trade surplus in all months of 2017 with the exception of July and December.
Indonesia's exports reached USD $14.79 billion in December 2017, up 6.93 percent year-on-year (y/y) from the nation's exports in the same month one year earlier. Meanwhile, its imports reached USD $15.06 billion, up 17.83 percent (y/y) from imports in the same month one year ago.
Hence, the trade deficit in December 2017 was caused by rapidly rising imports, boosted by the purchase of raw materials and capital goods for local manufacturing purposes. Meanwhile, December exports did not live up to expectations due to a slowdown in automotive parts and vegetable oil shipments.
Trade Balance Indonesia in Full-Year 2017
Overall, Indonesia's trade balance showed a USD $11.84 billion surplus in full-year 2017, higher than the USD $8.78 billion trade surplus posted in the preceding year. It is also the highest trade surplus of Indonesia over the past five years supported by the improving global economic context and accelerating economic growth in key trading partners.
Indonesia's total exports reached USD $168.73 billion in 2017, while imports reached a total of USD $156.89 billion. It is positive that the nation's non-oil & gas exports climbed 15.83 percent (y/y) to USD $153 billion in 2017, reflecting improving external demand. These non-oil & gas exports primarily involve fats and vegetable oils (USD $22.97 billion) and mineral fuels (USD $21.07).
Meanwhile, the majority of imported goods into Indonesia, last year, involved mechanical machinery or aircraft with an import value of USD $21.78 billion as well as electrical machinery or equipment with a combined value of USD $17.95 billion.
BPS Head Suhariyanto added that 74.99 percent of imported goods into Indonesia in full-year 2017 involved raw or auxiliary materials. Consumer goods imports contributed 9.03 percent to total imports, while capital goods contributed 15.98 percent. Overall, these percentage shares are more or less the same as last year.
China remained Indonesia's largest trading partner in 2017, accounting for 13.94 percent of Indonesia's exports and 26.79 percent of the country's imports.