Indonesia: Trade surplus improved in July – UOB

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

Key Takeaways

“Indonesia’s July trade surplus widened to USD2.6bn vs. USD1.3bn a month earlier, higher than market consensus of USD 2.3bn, with both exports and imports growth easing. Exports slowed to 29.3% y/y in July vs. June’s 54.5% as China steel production plunged in July to a 15-month low, hitting on Indonesia’s iron and steel exports (HS-72)… Meanwhile, imports slowed to 44.4% y/y in July vs. 60.1% in the previous month, attributable to lower capital goods imports (HS-84).”

“From January to July this year, Indonesia booked USD14.4bn trade surplus which was significantly higher than the USD8.7bn surplus recorded over the same period last year. The country managed to narrow its current account deficit (CAD) last year, attributable to stronger exports recovery while imports were largely subdued amid weak domestic demand. Nonetheless, we still expect CAD to widen this year as the delta variant COVID-19 overshadows the global recovery.”