Indonesia: Exports plummet in June, while imports recover
July 15, 2019
According to Statistics Indonesia, the country recorded a trade surplus of USD 0.2 billion in June, matching May’s figure. However, June’s surplus was below market expectations and the USD 1.7 billion surplus recorded in the same month last year.
The weaker-than-expected showing came amid a rebound in imports (June: +2.8% yoy; May: -17.3% yoy), on the back of a recovery in non-energy imports. In contrast, exports continued to decline (June: -9.0% yoy; May: -9.3% yoy) on falling oil and gas exports. Lower prices for these commodities, coupled with soft global trade and ebbing economic momentum in key economies, explain the print. Moreover, disruption due to Ramadan likely also played a role.
Looking ahead, exports are likely to pick up some steam in H2 on a more supportive base effect but will remain soft, weighed on by ongoing trade war tensions and slowing global growth. Imports could also improve later this year as infrastructure development gathers pace, but are expected to decline over 2019 as a whole.
Author: Oliver Reynolds, Economist