2018 Economic Growth Potentially Negative

By : Herry Barus And Aldo Bella Putra | Monday, March 26 2018 - 16:30 IWST

Bank Indonesia

INDUSTRY.co.id - Jakarta - Economist Center of Reform on Economics (CORE) Mohammad Faisal reminded that Indonesia's economic growth in 2018 is potentially negative due to the deficit trade balance in the last three months from December 2017 to February 2018.

"The trade deficit for the third consecutive month 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 Sunday (25/3/2018).

He exposed deficit figures in February of Rp1.6 trillion, bringing the total deficit in the last three months since December 2017 to Rp15.1 trillion.

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

"Net exports that are driving economic growth during 2017 with 21 percent growth, 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 encourage widening the 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 the increase in interest rates of the central bank of the United States, the Fed.

In connection with this, BPS chief Suhariyanto told a news conference that the deficit in trade balance in February 2018 was triggered by oil and gas sector deficit of around Rp12 trillion, while the non-oil and gas trade surplus was Rp10.3 trillion.

"Deficit for three consecutive months, this should be our concern. This is certainly a warning for us all, January-February 2018, deficit of Rp12 trillion," said Suhariyanto in Jakarta.

Recorded in January 2018, the trade balance suffered a deficit of Rp10.4 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, boosted by a non-oil and gas surplus of 32.57 million tons and a deficit in oil and gas trade balance of 0.46 million tons.