Indonesia: Exports and imports plummet in May, trade balance moves to surplus
Exports declined 28.9% year-on-year in May (April: -7.3% year-on-year) on lower energy and non-energy exports due to lockdowns abroad. Imports were down an ever sharper 42.2% (April: -18.6% yoy), driven by domestic containment measures, slowing investment and low oil prices. As a result, Indonesia recorded a trade surplus of USD 2.1 billion (April: 0.4 billion deficit).
Regarding the outlook for the external sector, analysts at Nomura commented:
“Exports should remain weak, consistent with our global growth forecasts and slower growth in Indonesia’s main trading partners. In addition, the negative terms-of-trade effects from lower commodity prices will remain a headwind, alongside falling tourism receipts as travel remains constrained by border controls around the globe. On the import side, we think the contraction in the coming months because of soft underlying domestic demand in Indonesia is unlikely to be as severe as in May [as] the government has already started to re-open the economy, allowing businesses to operate from early-June.”