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Indonesia seen returning to a trade deficit in March: Reuters poll

Published 04/12/2019, 03:21 AM
Updated 04/12/2019, 03:25 AM
© Reuters. FILE PHOTO: Workers help unload bags of rice from a cargo ship onto a truck at Tanjung Priok Port in Jakarta,

JAKARTA (Reuters) - Indonesia probably swung back to a trade deficit in March after the previous month's surprise surplus, as imports likely fell less sharply than exports did, a Reuters poll showed.

The poll's range of predictions was wide, with one analyst seeing a surplus of $1.3 billion and another forecasting a $460 million deficit. But the median was for a $180 million deficit in March.

However, the central bank found indications that there was a surplus in March, senior deputy governor Mirza Adityaswara told reporters on Friday.

Except for February, when there was a $330 million surplus, Southeast Asia's largest economy has had a trade deficit every month since October.

In the poll for March, exports were seen falling from a year earlier for a fifth straight month, with a contraction of 11.82 percent, compared with February's revised 11.16 percent fall.

The March shrinkage in imports was predicted to slow to 3.76 percent, from a revised 13.81 percent drop in the previous month.

The 2018 trade deficit was a record $8.5 billion and authorities have been trying to reverse that by raising tariffs to halt imports and relaxing rules to support exports.

Masyita Crystallin, a DBS economist, said with the U.S. Federal Reserve becoming more dovish, inflation stable, and the rupiah no longer under intense pressure, "deterioration in trade balance would be the only factor left for Bank Indonesia (BI) to contemplate a policy rate cut this year".

© Reuters. FILE PHOTO: Workers help unload bags of rice from a cargo ship onto a truck at Tanjung Priok Port in Jakarta,

BI has kept interest rates steady after raising them by 175 basis points in a 2018 tightening cycle, in response to a weak rupiah and capital outflows that were partly prompted by large trade and current account deficits.

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