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Manufacturers unconvinced about recovery, import data shows
The Indonesian Chamber of Commerce and Industry (Kadin) expects manufacturers to hold back on imports of raw materials and capital goods amid reduced confidence about business prospects following the recent surge in coronavirus cases and deaths.
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Final check: A worker inspects the quality of products at a steel factory at the Cikarang industrial estate in Bekasi, West Java, on Oct. 4, 2019. (Antara/Fakhri Hermansyah)
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ndonesia’s imports may fall back to levels not seen since last summer as manufacturers face renewed risks following the recent surge in COVID-19 cases and deaths, the Indonesian Chamber of Commerce and Industry (Kadin) has said.
Kadin deputy chairwoman Shinta Kamdani said she was expecting import growth to slow down again in the next one to three months as manufacturers remained under pressure and had no room for speculative imports, such as hoarding raw materials.
“Instead, companies limit imports and production [and decide on these] depending on placed orders or [current] demand, so that their overhead costs do not swell up and make cash flow vulnerable at a time when uncertainty about domestic demand remains high,” Shinta told The Jakarta Post in a text message on Monday.
Read also: Exports, imports maintain rapid growth in May
Indonesia has recently seen a series of record-breaking daily new confirmed coronavirus cases, surpassing 20,000. The latest wave of the pandemic has also led to daily new confirmed deaths exceeding 400, close to the peak seen in January.
While exports rebounded earlier, imports only started to grow annually in February of this year as economic activity at home picked up. In May, a month after the peak spending period in Ramadan, imports grew 68.68 percent year-on-year (yoy) to US$14.23 billion, driven largely by raw materials, followed by consumer goods.
