JAKARTA: Indonesia posted its widest monthly trade deficit in history in April as exports slumped, while the pace of fall in imports was slower than expected, data from the statistics bureau showed on Wednesday.
The resource-rich country booked its first trade deficit in three months at $2.5 billion in April, and it was the widest ever, according to Refinitiv Eikon data.
This compared with a median forecast of $500 million deficit in a Reuters poll and a $671 million surplus a month before.
The data makes the central bank even less likely to ease monetary policy in the near term, said Wisnu Wardana, Bank Danamon's economist in Jakarta.
"We think there's a slim chance of shift in monetary stance for the time being," he said.
Bank Indonesia (BI) has been pressured to cut interest rates after the US Federal Reserve turned dovish and Indonesian data, including benign inflation and weakening gross domestic product (GDP) growth, augur well for such a move.
But officials have been saying they want to see significant reduction in Indonesia's current account deficit - which shows trade in goods and services - before making any cut.
BI targets to shrink the current account deficit to 2.5% of GDP this year, from 3% in 2018.
All 20 analysts in a separate Reuters poll forecast BI to keep its main interest rate unchanged for a sixth straight policy meeting on Thursday, as rising US-China trade tensions renew pressure on the rupiah.
There was little reaction in the rupiah spot market after the larger-than-expected April trade data, but the main stock index extended its losses.
April exports were down 13.10% on an annual basis at $12.60 billion, led by a drop in shipments of refined oil and natural gas products. The poll had estimated a 7.15% contraction.
Exports of Indonesia's main commodities, coal and palm oil, also sank.
Imports fell 6.58% from a year earlier to $15.10 billion, versus a 12.1% drop expected in the poll.
On a monthly basis, imports of food like frozen beef, soybeans and fruits rose as the Muslim-majority country prepared for the fasting month of Ramadan.
Statistics bureau chief Suhariyanto warned there could be more challenges coming forward.
"The challenges in 2019 are extraordinary, the global economy is weakening, our trade partners as well. So like it or not, we will be affected," he said, noting that Beijing's trade war with Washington has also increased uncertainty.
China, Indonesia's biggest trade partner, contributed $1.9 billion to the deficit in April. Indonesia had a $704 million surplus in its trade with the United States in the same month.
Finance Minister Sri Mulyani Indrawati warned that the slump in trade activities may put pressure to Indonesia's economic growth, which is targeted at 5.3% this year.
Uncertainties resulted from trade tension between the United States and China would mean that "we cannot rely on export as an engine of growth," Indrawati told reporters.
"The economy is under very serious global pressure due to uncertainties, we must continue to look at our domestic aspects and we must remain vigilant," she said.