Indonesia: the trade balance remains in surplus but slips below…



Soaring imports reduce trade surplus to $1 billion

Stenley Lam

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$1 billion December trade balance

December’s trade balance remains in surplus

Indonesia’s exports and imports extended their double-digit growth streak through the end of 2021. Exports grew by 35.4% (vs. 40.7% expected) while imports jumped by 47.9% in December 2021. Exports benefited from higher commodity prices, but fell short of expectations. Meanwhile, imports have accelerated well beyond forecasts as Indonesia’s economy gradually reopens after restrictions on mobility were partially eased. The faster-than-expected recovery in imports, coupled with disappointing export growth, led to a narrowing of the trade surplus to $1 billion, from estimates of a surplus of $3.1 billion. dollars.

Indonesia’s trade balance

Statistics Badan Pusat
Weakening trade balance could mean more pressure on IDR in the short term

Indonesia’s economy continues to gradually reopen, suggesting that import growth is likely to continue through 2022. On the other hand, exports could fall in January, after a temporary coal export ban was lifted. introduced in January to address domestic supply issues. If the trend of rising imports and disappointing export growth continues, we can expect the trade balance to fall below the peaks recorded last year. A declining trade surplus suggests that support for the IDR could weaken in 2022, with the currency likely under pressure as the Fed prepares for its expected rate hike cycle.


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