JAKARTA (Reuters) - Indonesia is likely to have swung back to a trade deficit in July, which would snap a two-month streak of trade surplus, as the country’s exports and imports are seen plunging amid broader weakness in global trade, a Reuters poll showed on Tuesday.
The median forecast from 13 economists in the poll was for a $420 million trade deficit last month, compared with a $297.3 million revised surplus in June.
“It’s more due to the effect of a continued slowdown in the global economic growth,” said Fakhrul Fulvian, an economist with Trimegah Sekuritas.
Southeast Asia’s largest economy has seen its exports and imports falling in recent months, except in June, when imports grew slightly.
In the poll for July, economists predicted imports to swing back to a contraction of 18.1% on-year, compared with the 2% increase in June.
The July shrinkage for exports was predicted to accelerate to 11.4% on-year, from a revised 8.9% decline in the previous month.
Problems surrounding shipments of palm oil, the country’s top commodity, to India and the European Union put extra pressures on exports, Fulvian said.
Indonesia is the world’s largest producer of the edible oil, with India and the EU being major buyers.
“The government must quickly negotiate on CPO (crude palm oil) so we can export more to the EU or India,” Fulvian said.
Malaysia has taken over Indonesia’s spot as the biggest supplier of palm oil to India in the first half of 2019, after the South Asian country gave Kuala Lumpur lower import tariffs.
Jakarta has offered to open up sugar market for India in exchange for similar tariffs with that for Malaysia.
Polling by Nilufar Rizki and Tabita Diela; Editing by Sherry Jacob-Phillips