Indonesia: Exports surge in February while imports continue to decline
Indonesia posted a trade surplus of USD 2.3 billion in February, contrasting January’s revised USD 0.6 billion deficit (previously reported: USD 0.9 billion deficit) and confounding market expectations of a small deficit.
The better-than-expected outturn was driven by a rebound in exports (February: +11.0% year-on-year; January: -2.1% year-on-year) despite soft Chinese demand, and a further decline in imports (February: -5.1% year-on-year; January: -4.8% yoy) amid government import substitution policies and Covid-19 disrupting supply chains.
Regarding February’s surprisingly strong export reading, analysts at Nomura commented:
“We believe the impact of the COVID-19 outbreak has not been reflected in February’s trade figures, suggesting export growth could deteriorate in the near term. By destination, non-O&G export growth to China was stable at 21.5% y-o-y in February (January: 22.2%). This is in line with other countries such as South Korea and Taiwan, for which reported export growth to China increased in February, and may reflect a still-limited impact from the lockdowns in China on the inflow of goods, particularly raw materials.”