Indonesia: Merchandise exports growth softens but remains vigorous in January
Merchandise exports soared 12.2% year-on-year in January, following December’s 14.4% jump and supported by higher oil and non-energy exports. Meanwhile, merchandise imports plunged 6.5% in annual terms in January (December: -0.5% yoy), likely indicative of reeling domestic demand.
The merchandise trade balance deteriorated from the previous month, recording a USD 2.0 billion surplus in January (December 2020: USD 2.1 billion surplus; January 2019: USD 0.6 billion deficit). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 24.4 billion surplus in January, compared to the USD 21.8 billion surplus in December. Solid trade surpluses in Q4 and at he outset of 2021 point to recovering external demand dynamics, following the first quarterly current account surplus for nine years in Q3.
Looking to this year, both exports and imports should recover as the impact of the pandemic recedes. The recovery in imports should be sharper than that of exports due to a supportive base effect, which will push down the trade surplus and cause the current account deficit to widen.