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According to Destatis, Germany exported goods worth 1.2 billion US dollars (roughly 1.1 billion euros) to Indonesia in the first six months of 2020. That is a decrease of 23.4% (in euros: -21.4%) compared to the same period last year. This half-yearly delivery value is the lowest since 2009 and half as high as that of 2013.

The reason for the collapse is the COVID-19 pandemic, which caused the country's economic performance to drop by 1.3% in the first half of 2020. The second quarter in particular was affected by the restrictions on public life: production in many industries was temporarily idle. This caused the gross domestic product (GDP) to shrink by 5.3% from April to June. The economic output of the manufacturing industry even fell by 6.2%.

As a result, Indonesia's demand for imported goods fell significantly. According to Indonesia鈥檚 statistics office BPS, imports fell by 14.3% in the first half of 2020 compared to the previous year. All larger product groups recorded considerable losses and the archipelago obtained fewer goods from all major supplier countries than in the previous year. Indonesia's industry sector, which is highly dependent on foreign intermediates, saw a drop of 4%. However, the export of medical technology increased.

Decline in machinery less than the overall trend 

According to Indonesia鈥檚 import statistics, Germany ranked eleventh in the list of suppliers of goods in the first half of 2020 with a share of 2.4% (first place: China with 28.6%). Germany primarily supplies high-quality industrial goods. About a third of the imported goods from Germany consist of machines. Here, the decline of -18.3% was below the overall trend.

Not all product areas were equally affected by the pandemic. For example, measurement and control technology, textiles and metal goods from Germany only saw losses in the single-digit percentage range. This could indicate that the corresponding deliveries are essential even in times of crisis. In the case of industrial chemicals, there is even a slight plus.

The clear plus was seen in the medical technology sector. Here, Germany exported goods worth US$52.2 million, 22.2% more than a year earlier. The main reason for this is the delivery of apparatus for mechanotherapy and massage devices (HS-Pos. 9019) as well as X-ray machines and devices for radiation therapy (HS 9022). Ventilators only make up a small proportion of deliveries. Germany has traditionally been one of Indonesia's most important sources of supply for medical technology. The import statistics available so far do not reveal whether the archipelago will have greater demand in this area in 2020.

Broken supply chains 

At the grossest level, the decline in German exports of chemical products (SITC 5) and intermediate products / semi-finished goods (SITC 6) to Indonesia in the first half of 2020 remained within the usual fluctuation ranges. However, the machinery and vehicles sector (SITC 7) recorded a significant statistical dent at -36.4% compared to the previous year. This corresponds to a decrease of almost 300 million US dollars.

This applies above all to electronics, and presumably affects products from supply chains that tore under the influence of the corona pandemic. However, Indonesia is, relatively speaking, little involved in the international supply chain and therefore has a smaller decline in economic output and foreign trade than other countries in the region.

The Indonesian automotive industry hit particularly hard by the pandemic and recorded sales losses of 41.8 percent in the first half of 2020. This also affected German manufacturers: car deliveries to the archipelago fell by 25.7% to $13.3 million in the same period. Truck exports fell by as much as 69% to only $6.5 million. The export of automotive parts halved to $16 million. 

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GTAI is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities in the German market. It provides information on foreign trade to German companies that seek to enter into foreign markets.