Sunday, 20 June 2021 | 22:52 WIB

Consecutive Trade Balance Deficits, Q1 Net Export Contribution Potentially Grows Negative

Consecutive Trade Balance Deficits, Q1 Economy Potentially Grows Negative

JAKARTA, NNC - Economist expert of Center of Reform on Economics (CORE) Mohammad Faisal reminded that net export contribution to economic growth in the first quarter of 2018 is potentially negative due to trade balance deficit in the last three months from December 2017 to February 2018.

"The trade deficit for the first three consecutive months is the first time since 2014. Previously we enjoyed a surplus," said Mohammad Faisal who is also the Executive Director of CORE through a written statement received in Jakarta on Monday (3/26/2018).

He explained the deficit figures in February were IDR1.6 trillion, bringing the total deficit in the last three months since December 2017 to IDR15.1 trillion.

CORE also argues that it should be a serious concern of the government, because one of its impact is the difficulty of achieving higher economic growth in 2018.

"Net exports that are driving economic growth during 2017 with 21 percent growth are potentially contributing negatively to economic growth in the first quarter of this year," Faisal added.

In addition, the government needs to understand that the trade deficit will also promote widening current account deficit.

According to Faisal, this is one of the factors driving the weakening of the rupiah, in addition to external factors such as interest rate hike by the central bank of the United States, the Fed.

In connection with this, BPS Head Suhariyanto told a news conference that the deficit in trade balance in February 2018 was triggered by oil and gas sector deficit of around IDR12 trillion, while the non-oil and gas trade was surplus by IDR10.3 trillion.

"Deficit for three consecutive months, this should be our concern. This is certainly a warning for us all, January-February 2018, the deficit was IDR12 trillion," said Suhariyanto, quoted from Antara.

It was recorded in January 2018 the trade balance suffered a deficit of IDR10.4 trillion, or higher than February 2018. It is expected that in the next month Indonesia's trade balance could again pocket a surplus.

In terms of trade volume, the trade balance pocketed a surplus of 32.12 million tons, driven by a non-oil and gas balance surplus of 32.57 million tons and oil and gas trade balance deficit of 0.46 million tons.