Indonesia: Merchandise exports growth remains strong in June
Merchandise exports skyrocketed 54.4% year-on-year in June, following May’s 62.0% surge and supported by soaring oil and non-energy exports as well as by a low base effect. Meanwhile, merchandise imports jumped 60.1% in annual terms in June (May: +68.7% yoy).
The merchandise trade balance narrowed from the previous month, recording a USD 1.3 billion surplus in June (May: USD 2.7 billion surplus; June 2020: USD 1.2 billion surplus). Lastly, the trend strengthened, with the 12-month trailing merchandise trade balance recording a USD 28.1 billion surplus in June, compared to the USD 28.0 billion surplus in the previous month.
Commenting on the release, Nicholas Mapa, senior economist at ING, stated:
“The strong imports and exports suggest a modest pickup in economic activity, with exports helping drive manufacturing. In contrast, the resurgence in raw materials and capital goods suggest a resumption of investment appetite. This development, however, translates to a widening current account deficit (due to a narrowing trade surplus) which would, in turn, put pressure on the currency in the near term, especially after the central bank governor pledged to keep policy accommodative for the rest of the year.”