Indonesia booked a record in trade balance last year (2020), creating a surplus of $21.7 billion, the first biggest ever and a record in this country’s history. But, Trade Minister Muhammad Lutfi expressed worries as this was mostly caused by sharp drop in import, reflecting a drop in national production.
According to data, in 2020, Indonesia’s import value was down 17.3% year on year, while the export was down by only 2.6%. So, the surplus was not triggered by export increase, but by sharp drop in import.
The export value in 2020, reached US$ 163.3 billion, of which oil and gas and non-oil and gas contributed US$ 8.3 billion and US$ 155 billion, respectively.
The import value, meanwhile, reached US$ 141.6 billion (down 17.35% year on year). Import of oil and gas contributed 14.3 billion, while non-oil and gas contributed US$ 127.3 billion.
“This is the biggest surplus in our trade balance, since the financial crisis of 1998, in particular,” Lutfi said in a virtual press conference on Friday, January 29, 2021.
“Our import was down sharply last year, showing a drop in import of raw material for production and industry. This is something that to be worried about since this import drop reflects our drop in production,” Lutfi said further.
He said around three-fourth or 70.3% of Indonesia’s import are raw material for the industry. When the supply of raw material is down, the industry production will automatically down. “The industry production was down due to a lower community consumption, I guess,” Lutfi said.
The drop of community consumption, he said, would significantly impact on national economy growth since it contributed around 54% of Indonesia’s GDP (Gross Domestic Product).