Indonesia Posts Surprise Trade Deficit

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Indonesia posted a surprise trade deficit in September as the U.S.-China trade war and a global slowdown continued to weigh on exports in Southeast Asia’s biggest economy.

Exports contracted for an 11th consecutive month, falling 5.7% from a year ago but not as much as the decline of 6.5% forecast in a Bloomberg survey of economists. That resulted in a trade deficit of $160.5 million, versus a surplus of $124 million estimated in the survey.

Key Insights

• Imports also declined, falling 2.4% to $14.3 billion compared to a year earlier. The median estimate was for a 5.5% drop
• Indonesia posted an annual trade deficit of $8.6 billion last year, the widest shortfall since 1975, when the agency began the regular release of data. That prompted the government to adopt a slew of measures, including higher tariffs on some goods, in a bid to curb imports
• Bank Indonesia has cut interest rates three times this year to support the economy, while remaining mindful of pressures on the currency. Its next policy decision is due Oct. 24, and policy makers have signaled that the stance remains accommodative

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