Indonesia’s economic outlook has dimmed as new data reveals a widening trade deficit in May alongside a contraction in domestic manufacturing activity.
The combination of external imbalances and weakening industrial output marks a significant shift for the Southeast Asian economy, which has previously relied on robust export performance and steady factory expansion to drive growth.
The trade balance turned negative in May, indicating that imports outpaced exports during the period.
This development complicates the macroeconomic picture for Jakarta, particularly as global demand remains uneven.
Simultaneously, the Purchasing Managers’ Index (PMI) for manufacturing fell below the 50-point threshold, signaling a contraction in the sector.
A reading below 50 denotes shrinking activity, suggesting that factories are facing reduced orders, lower production volumes, or both.