DEPUTY Head of the Institute for Economic and Community Research (LPEM) FEB UI Jahen Fachrul Rezki said the decreasing volume of Indonesian exports might be explained by several factors.
First, in terms of falling commodity prices. World oil prices as well as palm oil and coal fell.
“This is what caused the total value of Indonesia’s exports to fall,” said Jahen when contacted on Sunday (17/3).
These three commodities have been the main contributors to Indonesia’s exports so far.
Second is China’s weakening economy. It is estimated that China’s gross domestic product (GDP) in the first quarter of 2024 will be below 5%.
The weakening of China’s economy, which is Indonesia’s largest trading partner, certainly has an impact on export performance.
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Third, globally the world economy is also weakening. Japan, Germany and the UK are technically in recession.
“We may anticipate a decline in global demand and the impact will be quite persistent if we look at the trends in the data. Only India and Vietnam have economies projected to grow higher compared to Indonesia,” said Jahen.
Indonesia certainly needs to try to find trade alternatives with countries where demand is still high.
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Meanwhile, geopolitical issues are likely to continue to haunt the world. S&P even projects that tension will continue to increase and have a negative impact on the global economy.
This may also be coupled with 2024 being a political year in many countries.
“Big countries hold elections and most choose to carry out populist programs,” said Jahen. (Z-3)
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