Trade balance during the Covid-19 pandemic

Abstract

This paper discusses Indonesia's trade balance during the first quarter of 2020 and examines developments in important sectors. The study investigates what policies need to be taken to make Indonesian economy survive. Based on quantitative and qualitative data, Indonesia's trade balance in April 2020 experienced a deficit of 344.7 million US dollars in the export-import performance of the oil and gas and non-oil and gas sectors, after a surplus of 715.7 million US dollars in the previous month. This slump was due to the decline in export performance of manufactured products and mineral fuels, which was influenced by slowing demand, disruption of global supply chains, and low commodity prices in line with the impact of the Covid-19 pandemic. However, positive performance of exports in gold, iron, and steel and vegetable oils and fats were able to prevent further decline in non-oil and gas. Despite experiencing a deficit in April, Indonesia's trade balance from January to April 2020 remained surplus of 2.25 billion US dollars. To prevent the trade balance decreasing, government's policy need to strive for independence and sovereignty in fulfilling logistics in the context of national resilience by strengthening the industry and domestic production capacity in various vital sectors.