UOB group economist Enrico Tanuwidjaja and Yari Mayaseti comment on the latest Indonesia trade balance results.
Key points to remember
âIndonesia’s trade surplus narrowed slightly to $ 4.4 billion in September from $ 4.7 billion the previous month (although below expectations of $ 3.8 billion), in a context of slowdown in imports, particularly of capital goods. Imports slowed to 40.3% yoy in September against 55.3% in August, against 50.0% expected. Meanwhile, exports slowed to 47.6% year-on-year in September from 64.1% the previous month, against a market consensus of 51.6% due to the slowdown in exports in the manufacturing sector as well as the decline in exports in agriculture.
âFrom January to September of this year, Indonesia recorded a $ 25.1 billion trade surplus, which is significantly higher than the surplus of $ 13.4 billion recorded during the same period. last year. If commodity prices remain high, exports could maintain their solid expansion to keep the trade surplus high. This will certainly help reduce the current account deficit (CAD) this year despite the rebound in imports (due to higher domestic demand) and a higher primary income deficit. This should provide more support for Indonesia’s external resilience. There is also a possibility for Indonesia to even post a current account surplus in the third quarter of 2021 (or even this year). Indonesia has recorded a trade surplus since May 2020 (17 consecutive months and could continue to do so), and for 2021 to date, a cumulative trade surplus of $ 21.85 billion has already exceeded the 2020 total trade surplus by 21 , 74 billion dollars.