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Improved trade deficit did little for economy, experts say
Indonesia recorded exports worth a total of US$167.53 billion in 2019 and imports at $170.72 billion, resulting in a $3.2 billion trade deficit.
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Keep it steady: A worker gestures as a crane lifts lumber for export onto a cargo vessel at a port in Lianyungang, Jiangsu province, China, in December. (Reuters/Stringer)
T
he narrowing of Indonesia's trade deficit likely did little to stoke economic growth in the fourth quarter of 2019 given the country’s weak exports and imports, economists have said.
Indonesia recorded exports worth a total of US$167.53 billion in 2019 and imports at $170.72 billion, resulting in a $3.2 billion trade deficit, Statistics Indonesia (BPS) data shows.
Although the deficit was much lower than $8.7 billion recorded in 2018, total exports contracted 6.9 percent last year and total imports plunged deeper at 9.53 percent, signifying weak overall trade activities.
University of Indonesia rector Arie Kuncoro said the trade tensions around the globe had resulted in a lack of demand for Indonesia’s products, adding that it took a toll on the country’s exports and imports last year.
“The trade deficit did not have much of an impact on the country’s economic growth,” Arie told The Jakarta Post, adding that domestic spending, not exports, was the main factor behind boosting economic growth to 5.1 percent in the fourth quarter of last year.
Indonesia’s GDP grew 5.02 percent in the third quarter last year, according to the latest data available, constituting the slowest growth in more than two years. Consumer spending, which accounts for more than half of GDP, stagnated while investment cooled and exports slumped.
Arie cited Bank Indonesia data that showed Indonesians were more inclined to spend money on consumer goods as the consumer confidence index rose to 126.4 points in December from 124.2 in November, indicating greater optimism among consumers about the domestic economy.
