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Indonesia: Trade surplus increased in October – UOB

Enrico Tanuwidjaja, economist at UOB Group, and Agus Santoso, junior economist, comment on the latest figures on Indonesia’s trade balance.

Key points

Indonesia posted its 42nd consecutive month of trade surplus thanks to higher-than-expected exports. Indonesia posted a strong trade surplus of US$3.5 billion in October 2023, above the US$3.4 billion in September and the consensus forecast of US$3.4 billion.

Oil and Gas (OG) exports grew 6.6% year-on-year, continuing their positive growth trajectory and non-oil and gas (non-OG) exports continued to fall 11.4% year-on-year, better than the previous month’s contraction of 17.7% year-on-year. For their part, imports of non-oil goods contracted 4.7% year-on-year, above the 2.8% contraction in September or 3.7% month-on-month. Imports of non-agricultural goods also contracted 1.9% year-on-year in October, below the contraction of the previous month (14.5% year-on-year), due to increased imports of consumer goods, capital goods and raw materials.

Overall, the increase in total imports of consumer components and raw materials indicates that household consumption and industrial activity began to improve. Coupled with moderating capital goods imports as investment accelerates in the third quarter of 2023 and the commissioning of several new foundries in the first quarter of 2024, the trade surplus is expected to continue to rise.

Source: Fx Street

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