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Trade balance on rocky road this year as coronavirus risks loom
Businesspeople and analysts expect Indonesia’s trade deficit to widen this year as the coronavirus epidemic is likely to drag down exports to China.
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A medical worker shows a test tube after taking samples taken from a person to be tested for the new coronavirus at a quarantine zone in Wuhan, the epicentre of the outbreak, in China's central Hubei province, on Feb. 4. (AFP/-)
Businesspeople and analysts expect Indonesia’s trade deficit to widen this year as the coronavirus epidemic is likely to drag down the country’s exports to China.
They said the coronavirus disease (COVID-19) that first appeared in Wuhan, China, in early December would not only affect exports but also imports of raw materials of industrial goods from the world’s second-largest economy.
Indonesian Employers Association (APINDO) trade division head Benny Soetrisno said in Jakarta on Monday that the outbreak would would significantly impact Indonesia in the second quarter of 2020, when stocks of imported raw materials used for exported-oriented goods would run low amid China’s currently limited capacity to export to Indonesia.
In January, imports of raw materials and capital goods dropped by 7.35 percent and 5.26 percent year-on-year (yoy), respectively, Statistics Indonesia (BPS) announced on Monday.
“Finding alternative raw materials will certainly be difficult, as it takes time to develop them,” said Benny, adding that materials would be more expensive even if companies managed to find other import sources, eventually pushing up prices of end products.
“There are no alternative moves for now,” he concluded.
But raw material shortages are not the only COVID-19 effect that could worsen already sluggish exports and imports, which could result in another trade deficit in 2020, experts predict.
