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Weakening trade forebodes Indonesian economic slowdown
The country’s exports fell almost 10 percent year-on-year (yoy) to US$14.28 billion in August while imports plunged deeper by 15.6 percent annually to $14.20 billion.
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The loading and unloading facilities at the Jakarta International Container Terminal (JICT), Tanjung Priok, North Jakarta. (Antara/Dhemas Reviyanto)
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ndonesia’s trade data announced on Monday paints a bleak outlook for the country’s economy as it hints at cooling domestic consumption and stagnating investment, the two key contributors to its gross domestic product (GDP).
The country’s exports fell almost 10 percent year-on-year (yoy) to US$14.28 billion in August while imports plunged deeper by 15.6 percent annually to $14.20 billion, Statistics Indonesia (BPS) data showed.
Imports of consumer goods to capital goods and raw materials all plummeted in a sign of softening economic activity.
“Overall, with slowing imports — particularly for raw materials and capital goods — domestic investment tends to stagnate amid a similar global trend and increasing United States-China trade tensions,” said private lender Bank Permata economist Josua Pardede.
Monday’s data revealed that auxiliary and raw materials imports nosedived 18.06 percent yoy to $10.36 billion in August while capital goods imports weakened by 5.83 percent to $2.48 billion in the same period.
The weakening raw material and capital goods imports signals cooling manufacturing and eventually investors’ decision to put business expansions and investments on hold at a time when President Joko “Jokowi” Widodo strives to push the sector higher to accelerate the country’s economic growth.
Indonesia’s economic expansion slowed to 5.05 percent in the second quarter, its lowest level in the last two years.
