Indonesian Trade Performance Nosedives Post-Ramadhan

JAKARTA, KOMPAS.com – Statistics Indonesia reports an underwhelming Indonesian trade performance following the end of Ramadhan celebrations.

Exports plummeted 28.95 percent year on year in May 2020 to $10.53 billion.

Indonesia’s weak export performance was due to the 42.64-percent year-on-year plunge in oil and gas exports. Shipments of manufactured goods likewise dropped 27.81 percent year on year.

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Statistics Indonesia recorded a trade surplus of $4.31 billion between January and May 2020.

During the same period last year, the Indonesian economy experienced a trade deficit of $2.7 billion.

“The performance is similar to last year’s Eid ul-Fitr which also saw a drop in June 2019. Imports typically weaken during Eid ul-Fitr. Last year it was because of several public holidays, but 2020 was because of work from home situations and minimal activities,” said Head of Statistics Indonesia Suhariyanto.

Other commodities that contributed to a weak Indonesian trade performance included crude oil, coal, and palm oil.

The Indonesian economy managed to book a trade surplus of $2.09 billion in May despite weaker export performances.

This was welcome news for Suhariyanto given that the Indonesian economy suffered in their imports and exports amid the coronavirus pandemic.

Identifying weak export areas

The slowdown in Indonesian export performance was largely caused by a significant dip in the manufacturing sector.

The agriculture sector plunged 25.48 percent year on year as demand for commodities such as coffee, spices, aromatics, and white pepper weakened.

“Weak demand for commodities in the manufacturing sector include palm oil, sports shoes, electrical appliances, and base metals. Whereas in mining it was coal, metal ore, lignite, and other mining export commodities,” said Suhariyanto.

The most significant drop in Indonesian exports month on month was in May at $382.5 million. Exports for metal and steel increased to $130.6 million.

Indonesia’s biggest exports went to China, the United States, and Japan respectively.

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Altogether, the three export destinations accounted for 41.82 percent of Indonesia’s total export in manufactured goods.

“Our export destinations have not changed because the changes take some time. Although the government has expanded our product diversification portfolio, Covid-19 has proven to be a tough challenge,” said Suhariyanto.

As a result of the pandemic, Indonesia’s economic performance for the first quarter this year  grew a mere 2.97 percent.

The result was a far cry from the expansion posted in the same period last year of 5.07 percent as well as the 4.97 percent recorded in the last quarter of 2019.

The Indonesian central government has since increased funding for Covid-19 management to Rp 677,2 trillion from Rp 405,1 trillion.

Special Advisor to the Coordinating Economic Minister Raden Pardede expects the Indonesian economy to rebound to a normal 5-percent level in 2023. 

(Writer: Fika Nurul Ulya | Editor: Sakina Rakhma Diah Setiawan) 

Source: https://money.kompas.com/read/2020/06/15/144000226/pasca-lebaran-ekspor-ri-jeblok-28-95-persen-pada-mei-2020