Jakarta. Indonesia posted its biggest trade deficit in four years in April as imports surged, wrong-footing analysts who expected a surplus for the month.
The statistics bureau said the April deficit reflected "seasonal factors" including this week's start of Ramadan, the Muslim fasting month.
Southeast Asia's largest economy had a deficit of $1.62 billion, the biggest since April 2014 while the Reuters poll forecast was for a $700 million surplus.
Imports in April soared 35 percent from a year earlier to $16.09 billion, compared with the poll forecast of 19 percent.
For the first four months of this year, there was a deficit of $1.3 billion, compared with a $5.4 billion surplus a year earlier.
Tuesday's surprise trade deficit came at time the rupiah has been under pressure due to rising US yields and oil prices and worries about capital outflows.
The trade data slightly widened its loss for the day, taking it to 14,030 to the dollar.
Although Indonesian authorities have so far just intervened in the currency market to put a floor under the rupiah, they have said they are willing to raise interest rates if need be to defend the currency. The central bank concludes a policy meeting on Thursday (15/05).
Myrdal Gunarto, an economist with Maybank Indonesia, said imports may continue to rise as domestic economic activities improve, while export growth may moderate due to a limited rebound in commodity prices.
That would lead to a bigger current account deficit of 2.2 percent of GDP in 2018, from 1.7 percent in 2017, he said, adding that this implies the dollar will strengthen against the rupiah.
In April, imports of most items rose, with notably high increases for oil and gas and some food, according to the statistics bureau.
"Imports usually rise before the start of the fasting month although I agree that [the April increase] is significant," bureau head Suhariyanto told reporters.
Suhariyanto said imports of raw materials and machinery also increased, which could mean Indonesia's manufacturing industry was boosting production.
In April, exports rose 9 percent from a year earlier to $14.47 billion, below the poll forecast of a 12 percent increase.