Adrian Wail Akhlas, Jakarta – Indonesia's trade balance swung back to a trade deficit of US$350 million in April on the back of falling commodity prices and plummeting global demand amid the COVID-19 pandemic, Statistics Indonesia (BPS) has announced.
The economy posted $12.19 billion worth of exports in April, a decrease of 7.02 percent year-on-year (yoy) and the sharpest fall in eight months, as oil and gas exports plummeted.
Meanwhile, total imports fell 18.58 percent to $12.54 billion last month, the biggest fall since October 2015, with Indonesians buying less of oil and gas as a result of the pandemic.
"There are two main factors: commodity prices fell significantly last month while the coronavirus pandemic upended global demand," BPS head Suhariyanto told reporters on Friday during a streamed news conference.
Commodity products are Indonesia's top exports.
The country's oil and gas exports declined 17.7 percent yoy to $610 million as a result of falling oil prices, while exports of mining products fell 29.47 percent yoy to $1.54 billion. Exports of manufacturing products dropped 1.77 percent to $9.76 billion in April.
Imports of consumption goods shrank 16.57 percent to $1.22 billion as a result of Indonesia's weakening purchases of date palm and dairy products.
Imports of raw materials plummeted 19.13 percent to $9.36 billion, while imports of capital goods shrank 17.11 percent to $1.96 billion.
"We should worry about falling imports of raw materials and capital goods as they will have a huge impact on the manufacturing and trade sectors, as well as the investment component in gross domestic product," Suhariyanto warned.
From January to April, the country booked a total of $53.95 billion in exports, an increase of 0.44 percent from last year's figure, while imports were $51.71 billion from January to March, a 7.78 percent yoy decrease.
Indonesia recorded a trade surplus of $2.25 billion during the first four months of the year, compared to a deficit of $2.35 billion in the same period last year.
"The overall export performance in the January-April period is encouraging and far better than many expectations," Suhariyanto said. "This is a positive sign amid the COVID-19 pandemic."
The World Trade Organization projected that global trade would shrink between 13 and 32 percent as the economic impact of the health crisis remained uncertain.
The WTO forecasts a rebound in the 2021 global goods trade of between 21 and 24 percent, depending largely on the duration of the outbreak and the effectiveness of policy responses.