Indonesia: Merchandise exports growth strengthens in December
Merchandise exports soared 14.6% year-on-year in December, following November’s 9.5% increase and supported by higher non-energy exports. December’s reading was the strongest since July 2018, as Indonesia benefitted from solid momentum among many Asian economies. Meanwhile, merchandise imports dipped 0.5% in annual terms in December (November: -17.5% yoy), but still marked the best result since June 2019, likely indicative of a slight uptick in domestic demand.
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 2.1 billion surplus in December (November 2020: USD 2.6 billion surplus; December 2019: USD 0.1 billion deficit). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 21.8 billion surplus in December, compared to the USD 19.6 billion surplus in November. Solid trade surpluses in the October-December period point to another healthy current account reading for Q4, following the first quarterly current account surplus for nine years in Q3.
Looking to next 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.