Indonesia: Trade surplus widened in August – UOB

Economist at UOB Group Enrico Tanuwidjaja, Haris Handy and Yari Mayaseti assess the latest trade figures in the Indonesian economy.

Key Takeaways

“Indonesia’s trade surplus in August widened to USD4.7bn vs. USD2.6bn a month earlier, higher than market consensus of USD 2.4bn, as exports hit a 10-year high of USD21.4bn driven by an increase in exports volume and higher commodity prices (especially for coal and palm oil, Indonesia’s main export goods), while export-oriented manufacturers took advantage of eased mobility restrictions. Exports rose 64.1% y/y in August (vs. July’s 29.3%), boosted by outbound shipments of palm oil (HS-15), coal (HS-27); notably to China, India, and Japan. Meanwhile, imports were also higher than expected posting a 55.3% y/y in August vs. 44.4% in July, reflecting improving domestic demand from a slowdown in July led by emergency response against the COVID-19 delta variant.”

“From January to August this year, Indonesia booked USD19.2bn worth of trade surplus which was significantly higher than the USD11.1bn surplus recorded over the same period last year. If the commodity prices remain high, exports could sustain their solid expansion to keep the trade surplus at an elevated level. This certainly will help to push the current account deficit (CAD) to a narrower position this year despite of rebound in imports (due to higher domestic demand) and higher primary income deficit; providing more support to Indonesia external resiliency.”